The periphery catches up – oh dear

One notable element of last week’s euro-zone GDP figures for the third quarter was the strength of the peripheral economies, even Greece, in relation to the core. This might be seen as confirmation that the five year long euro-zone crisis, which originated in those countries, is finally at an end.

But there is a less optimistic interpretation. Rather than coming to an end, the euro-zone crisis has evolved from a relatively narrow fiscal catastrophe in one or two very small countries, to widespread economic malaise and serious deflation risks across major chunks of the currency union.