Is the debt crisis back?

There are ominous signs that the turmoil in financial markets is starting to have bigger effects on the euro-zone. While Q4’s GDP figures showed growth maintained its pace at the end of last year, the concerns over euro-zone banks have added to the downside risks in 2016.

Most worrying, though, is the prospect of a reignition of the euro-zone sovereign debt crisis following the spikes in Greek and Portuguese government bond yields. The need for further bold policy action from the European Central Bank has become even more pressing.