The fiscal crisis in the euro-zone is threatening to derail the global economic recovery. Although Canada is a very open economy with exports still accounting for 30% of GDP, shipments to the euro-zone account for only 4% of those exports, equivalent to about 1.2% of GDP. Moreover, most of those exports go to the core northern euro-zone countries rather than the troubled southern Mediterranean countries. But the financial linkages are more important than trade. Should European banks run into trouble, this could lead to a tightening of trade financing conditions, not to mention put upward pressure on bank funding costs and borrowing costs in Canada.