While the news on the euro-zone economy has improved a bit in the last month or two, 2012 could still turn out to be crunch year for the currency union. Fiscal progress in the peripheral economies has continued to be hindered by a lack of growth and a number of the core economies are also facing recession. And although the ECB’s liquidity operations have eased some of the immediate market pressures, the policymakers continue to lack the fundamental firepower to tackle the crisis decisively. Against that background, our assumption is that a limited form of euro-zone break-up will commence later this year, with adverse economic and financial consequences across both the euro-zone itself and in other parts of Europe.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services