The recent news on the European economy has defied the ongoing concerns over the fiscal crisis in the peripheral countries of the euro-zone. But the recovery in the export and industrial sectors could soon start to lose steam in response to slower growth in the US and elsewhere and the recent renewed rise in the euro. Meanwhile, the enormous fiscal squeeze underway in the periphery is already hitting consumer and business confidence in the region hard. With Germany and the core set to embark on its own austerity programme, growth looks set to slow again over the coming quarters. Against that background, doubts over the future of the currency union are set to persist and the euro is likely to come under renewed downward pressure.
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