It had been the star economic performer globally for a time, but recent unease around Italy, Brexit and a looming trade dispute has highlighted the fact that the euro zone's woes are never far away.
Erik Nielsen, group chief economist with Unicredit, is in Dublin for the banking conference of the Federation of International Banks in Ireland. He said he believed recent weakness in a number of economic indicators in the euro zone was more of a hiccup than a long term trend.
"We can't be completely sure, but we came out of 2017 with record global growth - probably more than 5% of global GDP (gross domestic product). In the first quarter of this year, there were a lot of weather events that exacerbated a natural slowdown from the high levels. The early number for the second quarter in the euro zone look like they've stabilised. Growth probably rose by an annualised 2%. That's good if it holds," he added.
Erik Nielsen pointed to a number of potential threats on the horizon, chief among them global trade pressures as the US and the EU ramp up the rhetoric around tariffs. "There is never a winner in a trade war. There are various estimates as to how bad it can be, but what I fear most is that the US appears to have left its position as global leader of the multilateral system of the rule of law in global trade and investment that has served the world well since the Second World War. "Right now, there's a vacuum and that feels uncomfortable," he said.
On the news of House of Fraser closing half its stores in the UK, Erik Nielsen said it was the latest sign that Brexit was starting to bite. "After the referendum, there was talk from Brexiteers that it wasn't so bad, but the weaker pound means inflation has gone up, import prices are higher, and incomes have come down. More importantly now, businesses don't want to invest in the economy because they don't know what's coming out of Brexit," he concluded.
MORNING BRIEFS - The EU has announced plans for a range of retaliatory tariffs on $2.8 billion worth of US imports. The move is in response to the decision by the US to extend tariffs on steel and aluminium coming from the EU, Mexico and Canada. The European Commission said the tariffs would apply to goods ranging from whiskey to pleasure boats.
***Private bus operator Go-Ahead Ireland is recruiting 425 staff as part of an €8.5m investment here.
It is taking on up to 350 bus drivers as well as engineers, operational and administrative staff. Go-Ahead was awarded a contract to run 24 of the existing Outer Dublin Metropolitan Area bus routes by last year.
*** House of Fraser said today it plans to close 31 of its 59 stores in the UK, which will see 2,000 full time jobs lost across its operations. Thousands more part time and concession staff will be affected. Over half of the House of Fraser's UK stores are to close as part of the restructuring. Belfast and Dublin are not affected. House of Fraser is the latest UK retailer to announce store closures as it deals with the onslaught of online retailing, but also a slowdown in consumption in the UK as consumers deal with mounting inflation because of a weaker pound since Brexit. Wages are rising at a slower pace meaning people are effectively poorer and cutting back on spending.