Hope is an optical illusion

The left-liberal daily La Repubblica calls 5 March 2009 "black Thursday", warning that the European cut in its key interest rate could lead to a deflationary spiral: "Europe has officially admitted that it has slid into the worst crisis of the post-war era. ... The most alarming thing is the speed with which the European economy has collapsed. ... The European Central Bank has retracted its previous prognoses. The gross national product will go on sinking in 2010. The hypothesis of a long 'L' crisis is gaining ground, meaning a vertical crash followed by a long depression. ... The data point to the danger that Europe is on the precipice of deflation. ... Economic and monetary policy are often powerless against such a spiral. This Thursday heralded the advent of sombre times. Europe cannot expect help from abroad - either from the US or China. The hope that China could revive the global economy is probably just an optical illusion."

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