Italy’s economy is still in the slow lane with annualized growth of just .8 percent.
“It’s growing very slowly, its banks still haven’t been sorted out and there’s a lot of political instability,” says Springford.
Meanwhile, Greece is back in recession and the familiar public sector strikes have paralyzed transport systems this week. Police joined the protesters over proposed cuts to in-work benefits and pensions. The government plans further cuts in return for the next tranche of EU bailout money. A decision by EU finance ministers is due Monday.
Economist Codogno says the structural problems underpinning the eurozone have not gone away.
“The eurozone cannot survive without additional major reforms, which means more integration, in terms of fiscal and eventually even political.”
Overshadowing the bounce-back is Brexit. Britain’s decision to leave the EU is weighing on its economy as growth slows and wages fall, says Springford.