The broader European economy has continued to weather the Greek crisis well, helped by lower oil prices and, in the euro-zone itself, the decline in the euro exchange rate. But these positive forces look likely to fade in the second half of the year and in 2016, while the provisional agreement for a third bailout for Greece is unlikely to bring the crisis to a decisive end. Accordingly, growth in the currency union looks set to slow in the coming quarters, underlining the need for the European Central Bank to maintain and extend its policy support even as other central banks begin to tighten.
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