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It is a surprise only to the ECB in Europe that inflation is falling. I doubt countries where youth unemployment is 40/50% and higher are surprised prices are falling. Certainly no economist should be surprised given the withdrawal of LTRO financing and the rising capital needs of banks to comply with regulatory demands they strengthen their balance sheets and raise core tier 1 ratios and reduce leverage. Indeed anyone who has glimpsed at a bluff your way in Economics book at the book store could have provably explained to the ECB that as fiscal conditions are tightened in Europe you are going to get deflation unless it is accompanied by monetary easing in the form of QE but the trouble is under Teutonic pressure the ECB remains completely dysfunctional.  My prediction for what it is worth is that negative interest rates will be a damp squib and no use what ever. The US and UK realized years ago that you can't push on a string. While I am not opposed to the EU in principle, I think many of the people who are in charge are far too ideological in increasing the federal control and power of Europe, which fundamentally means that the system will have to kowtow to Germany. It's like the election of the EU president, Merkel is the kingmaker. When it comes to how to rescue the damaged economies, Merkel called the shots. She is fundamentally driven by domestic politics, which is extremely dangerous, since what is good for Germany is not necessarily good for anyone else, and people outside Germany end up having their national politics dictated by someone in a different country. This is a terrible way to run things and fundamentally undemocratic. Unlike the US, where the federal and state governments have specific sets of powers that were thought out before the official formation of the country, the EU is a messy hodgepodge of systems.