The euro-zone debt crisis is having a severely damaging impact on the European macro-economy. Not only are the troubled peripheral economies set to remain deep in recession, but growth prospects have weakened markedly both in the euro-zone’s core and in previously largely untouched parts of the rest of Europe, like Scandinavia. Meanwhile, the policymakers’ latest plans to tackle the crisis are already unravelling, and were never likely to address its root causes anyway. Accordingly, the outlook for the region is one of widespread economic recession, further financial turmoil, and continued doubts over the future of the euro-zone as a currency union.
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