The solid 0.8% gain in euro-zone GDP in Q1 has left our previous forecast of 1.0% growth in 2011 overall looking too downbeat. We have pushed it up to 1.5%, but an even stronger figure of 2.0% or so is not out of the question. Nonetheless, with the divergences between the core and peripheral economies wider than ever – and even the core likely to slow over the coming quarters - it would be wrong to think that strong growth alone will solve the region’s problems and secure the future of the single currency.
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