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March 6, 2014

In 2011 and 2012, many thought the Euro might break up due to the sovereign debt crisis. Unlike countries that have their own currency, countries in the Eurozone are dependent on the monetary policy of the European Central Bank (ECB). This disconnect makes Euro countries much more vulnerable than other countries to solvency crises. Since, then, however the new chief of the ECB, Mario Draghi, has engaged in a bond-buying program of Outright Monetary Transactions (OMTs) which has helped struggling periphery countries (Spain, Greece, Portugal, Italy, etc) stay solvent.

But while this has lowered interest rates in the struggling countries — and done enough to keep the Euro together — it has not been enough to get Europe out of the woods. Unemployment still remains cataclysmically high in Greece, Spain, Portugal, Italy, and high throughout the Eurozone. And now with inflation rapidly falling, many are worried that Europe is falling into debt deflation. Of course, Europe as a whole is not in deflation yet.

But as Paul Krugman argues, the process is already under way:

I'd say that to have debt deflation — in which falling prices due to a weak economy increase the real burden of debt, which depresses the economy further, and so on — you don't need to have literal deflation. The process begins as soon as you have lower inflation than expected when interest rates were set. It's also noteworthy that inflation rates in the highly indebted countries are all well below the eurozone average, with actual deflation in Greece and near-deflation in the rest. So the debt deflation spiral is in fact well underway. [The New York Times]

Europe's approach throughout the crisis has been to do the very minimum necessary to keep the Euro system afloat. It remains to be seen if that is an approach compatible with an economic recovery anytime soon. John Aziz

4:49 p.m. ET

Beyoncé will forgo her planned performance at the 2017 Coachella Valley Music & Arts Festival, event organizers announced Thursday. The pop star, who announced last month she is expecting twins with husband Jay Z, cited doctors' advice to "keep a less rigorous schedule in coming months" as the basis for the decision.

In lieu of leading the Coachella 2017 lineup, Beyoncé will headline the 2018 festival. Her replacement for this year has yet to be announced.

Beyoncé has not revealed her due date, but as she was already showing at her performance at the Grammys on Feb. 12, many predicted she might drop out of Coachella. She was slated to headline on both April 15 and April 22 of the two-weekend-long affair in Indio, California.

If you need to see it to believe it, read Coachella's announcement in full below. Becca Stanek

4:46 p.m. ET
Spencer Platt/Getty Images

During this week's congressional recess, some lawmakers returned to their home districts to meet with constituents for the first time since President Trump took office last month. Many Republicans found themselves facing angry crowds during subsequent town halls, including Sen. Joni Ernst (Iowa), Sen. Tom Cotton (Ark.), and Rep. Jason Chaffetz (Utah), while House Speaker Paul Ryan (R-Wis.). Rep. Dana Rohrabacher (Calif.), and others have been criticized for failing to make themselves available to their constituencies at all.

All the hubbub has some GOP representatives declining full-stop to hold town halls. In attempting to defend those evasive lawmakers, Rep. Louie Gohmert (R-Texas) on Tuesday cited the case of former Rep. Gabby Giffords (D-Ariz.), who was shot in the head at a constituent meeting in January 2011. After Giffords was shot — she survived the incident and returned to the House floor just seven months later, but resigned from Congress in 2012 — Gohmert says the House Sergeant at Arms "advised us ... that civilian attendees at congressional public events stand the most chance of being harmed or killed," arguing the meetings are a threat to public safety. Gohmert also cited the dangers of possible paid protesters from the "more violent strains of the leftist ideology ... who are preying on public town halls to wreak havoc."

One person who's not buying Gohmert's reasoning? Giffords, who on Thursday responded to his comments with a statement declaring town halls are "what the people deserve in a representative." She noted she "was shot on a Saturday morning. By Monday morning, my offices were open to the public." "To the politicians who have abandoned their civic obligations, I say this," she wrote. "Have some courage. Face your constituents. Hold town halls." Kimberly Alters

2:34 p.m. ET

Reince Priebus and Stephen Bannon continued their campaign to prove that they definitely don't hate each other and absolutely are best friends during a strange little interview at CPAC on Thursday that ABC News' Ali Rogin dubbed a "buddy comedy."

At one point, the pair were asked to name something that they like about the other. Preibus, apparently joking, offered up Bannon's "collars." "I love how many collars he wears," Preibus said. "It's an interesting look."

For his part, Bannon said: "I can run a little hot on occasions … the only way this works is Reince is always steady … but his job is by far one of the toughest I've ever seen in my life. To make it run every day, to make the trains — and you only see the surface."

Put the odd reference to Benito Mussolini aside and it's actually pretty sweet. Watch the rest below. Jeva Lange

1:53 p.m. ET
NICHOLAS KAMM/AFP/Getty Images

The race to become the Democratic National Committee chairman narrowed on Thursday when South Carolina Democratic Party Chairman Jamie Harrison dropped out, endorsing frontrunner Tom Perez in the process. Perez served as labor secretary under former President Barack Obama and holds about 205 of the 447 total DNC member votes. Rep. Keith Ellison (D-Minn.), backed by Sen. Bernie Sanders (I-Vt.) and the party's more progressive wing, trails Perez with around 153 votes.

"With so much at stake, our next chair will lead the fight of a generation," Harrison said in an email to NBC. "I'm standing by Tom Perez's side, and I hope you will join me in doing the same."

If Perez picks up at least 20 of Harrison's 27 votes, he will likely have a majority heading into the first round of voting Saturday. The winner needs only to win a simple majority of 224 votes or more; if no candidate achieves a majority Saturday, DNC members will cast votes in progressive rounds, eliminating the lowest vote-receiving candidates until a candidate emerges with the majority.

On Wednesday night, all of the DNC candidates went head-to-head in a CNN debate. You can watch a 90 second recap of what unfolded here. Jeva Lange

12:10 p.m. ET

Ted Cruz used some colorful — or rather, vespertilionine — language to describe the Democratic base during an interview at the Conservative Political Action Conference on Thursday.

"From the left, their base … There's a technical term for their base, " Cruz began.

"Moscow," his interviewer answered.

Cruz nodded, but added: "I was going a different direction, which was 'bat-crap crazy.'" Watch the exchange below. Jeva Lange

11:55 a.m. ET
Chip Somodevilla/Getty Images

On Thursday, former Republican House Speaker John Boehner claimed that a full repeal and replace of the Affordable Care Act is "not going to happen," calling the suggestion that it might just "happy talk," Politico reports.

Boehner, who resigned in 2015, instead suggested that there would be small changes to ObamaCare. "Most of the framework of the Affordable Care Act … that's going to be there," Boehner predicted. He added that he "started laughing" when he heard of President Trump's plans to quickly push through health-care reform: "Republicans never agree on health care," Boehner said.

President Trump has suggested that he will have a new health care plan by mid-March, but Boehner said he isn't buying it. "[Congressional Republicans are] going to fix ObamaCare — I shouldn't call it repeal-and-replace, because it's not going to happen," he said. Jeva Lange

11:39 a.m. ET

President Donald Trump on Thursday met with several top manufacturing executives to discuss regulatory reform and job creation. But amid all that boring talk, Trump implored General Electric CEO Jeff Immelt to discuss an important matter: the time he shot a hole-in-one.

"Jeff actually watched me make a hole-in-one," Trump informed the gathered businesspeople after Immelt greeted him during the roundtable. "Should you tell that story?"

Immelt, apparently, decided that he should. Watch the moment below. Kimberly Alters

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