In the classic horror movie storyline, at some point the heroes are able to stave off an attack by the monsters. Then they sit around and wonder whether the threat is past. The audience knows that it is not and that makes the movie more fun. But in reality these sorts of false dawns are less fun. So it goes with the Eurozone. The good news from Spain and Italy about bond auctions the other day boosted confidence a bit. So is the crisis over? The Economist says “no”. Why not?
Bond-market indigestion; a rating downgrade; the worsening mess in Greece; or the wrangle over private-sector losses: any of these could rattle confidence and trigger a much deeper recession. Even in the absence of an accident, conditions are hostile to growth.