Europe is at risk of a Japan-style lost decade unless members pull together to fend off the threat of recession, according to Christine Lagarde, managing director of the International Monetary Fund.
The IMF has warned there is a 40 per cent chance the eurozone could tip into its third recession since 2008, with deflation and economic stagnation hanging over the single currency bloc.
Even if the worst case scenario is averted, the IMF fears Europe could become trapped in years of low growth that drags down the global economy.
With inflation at just 0.3 per cent and the region’s economy flat-lining in the three months to June, economists are increasingly comparing Europe’s plight with the two decades Japan lost to very weak growth and falling