Modest recovery continues despite Greek crisis

Euro-zone economic activity has continued to recover despite the troubles in Greece. For now, worries about the crisis seem to have been offset by the benefits of a weaker euro and falling producer and consumer prices. Note, for example, that while the value of retail sales increased only modestly in Q4, sales volumes rose quite sharply. But reliable indicators such as the composite PMI still point to only a modest pick-up in GDP growth at the start of this year after a weak end to 2014. And there is a risk that a further escalation of the Greek crisis might hit economic sentiment and activity in the months ahead.