We are being warned that Europe is at risk of persistent deflation due to a dependence on the German economy.

It comes after results announced yesterday showed the German economy contracted in the three months to June, bringing growth in the Eurozone to a grinding halt.

GDP growth in Germany fell by 0.2% between the first and second quarter of this year.

While Eurostat says seasonally adjusted GDP remained stable in the euro area during the second quarter.

In the first quarter, GDP grew by 0.2% in the euro area, which is an increase of 0.7%.

But Nick Bullman, manager of of Checkrisk, says Europe is on the edge of a 'Japanese style deflationary trap' - which could have serious implications for Ireland.

And he told Newstalk Breakfast that this is because Europe is too dependent on the German economy.