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Eurozone Crisis – Today, Recession is Looming Across the Corner

For our Eurozone criris blog published periodically on Doitinvest, we have chosen today the topic of the double dip recession. What is double dip recession? Well, when you like a biscuit you dip it twice in your coffee (or chocolate or yoghurt). When recession likes a region, it pushes it back into its arms two years in a row. It seems that after the infamous 2011,European Union countries will go back into the same recession for the second year in a row.
But enough with definitions. The hidden fear for the Eurozone is called stagflation, the neo-liberal’s greatest worry. It is made of economic stagnation and inflation, all together. If economic stagnation is clearly here, inflation is actually quite a long short, since the raw materials prices are at normal levels and inflation in the member countries is quite low (1-2%). This does not mean safety from price increases, anyway. The problem is that most companies are struggling to improve their bottom lines and (whilst they cannot grow sales because the markets are stagnant) they are very keen to rise prices. And they will start doing price increases sooner or later… which means inflation.
So even if inflation is a long shot (6 months to 1 year according to my estimations), stagnation is here and I guess we might need to cope with it for the next quarters. At least this is what most of the economic journalists are saying today…

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