Second, the Union has suffered two major health scares in its beef industry. As consumers flock to goods perceived safer, and as the Union attempts to bail out the beef industry, food prices will fly ever higher. Europe's inflation is not limited to energy and beef. Pricey energy translates into higher manufacturing and transportation costs. The weak euro further complicates matters.
Inflation impacts Europe across the board.
Every state in the euro zone has broken the 2 percent barrier. So long as inflation remains high, the ECB will find it difficult to pare interest rates and jolt the economy forward. Interest rate cuts tend to bolster inflation. But while Europe does manage to keep itself somewhat isolated, it is much more exposed to the global economy than the United States. Less than 15 percent of America's GDP depends on foreign trade.