The eurozone’s anemic growth and inflation mean it’s probably already experiencing its own “Japanification,” and escape could prove hard if the Asian nation’s track record is any guide, according to ING Group.

Europe’s situation has long left it open to comparisons with Japan in the 1990s. In a report Monday, ING lists similarities including an increase in government debt, a buildup of bad loans at banks, an aging population and huge monetary policy loosening.

While Japan’s policy response to its crisis was slow, it also fell victim to bad timing, according to ING. Various chances of recovery were snuffed out by the 1997-98 Asian financial crisis, then the bursting of the dot-com bubble and later the global financial crisis.

That may well be the fate of the euro area, too, which last year appeared to be on the verge of unwinding stimulus only to be pushed back in the other direction. With global trade tensions weighing on sentiment and inflation expectations near a record low, the European Central Bank is facing the prospect of interest rate cuts or re-starting quantitative easing.

“Without a strong recovery, it is difficult to escape the low growth, low inflation and subsequently low rates environment,” said Carsten Brzeski and Inga Fechner, economists at ING. “An economic upturn could quickly be over and monetary policy might not have enough ammunition up its sleeve, with interest rates remaining stuck at the zero lower bound for years to come.”

The parallels mean Europe could be facing a ballooning of its central bank balance sheet in the years to come, and a major fiscal package could be needed. There is also the prospect of higher retirement ages to keep the labor force from shrinking.

“For the eurozone, the most important lesson is probably not so much the root cause of Japanification but the desperate attempts to get out (of) it,” ING said. “There will not be much room for rate hikes in the coming years.”

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