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Growing fractures threaten a fragile euro zone

From the U.S. to Japan, once crisis-stricken economies are stirring from their hibernation, and some observers expect Europe to soon follow suit – at least, if the monetary union doesn’t tear itself apart first.

The euro zone’s halting recovery appeared to hit another speed bump on Friday when the August reading of Germany’s Ifo business climate fell 1.7 points to 106.3, the fourth monthly decline in a row. A 0.2-per-cent GDP decline in the second quarter and the Ukraine conflict rattled German nerves, but no one should get their lederhosen in a twist. Analysts remain generally sanguine, expecting 0.4-per-cent growth in the third quarter. The rest of Europe, however, keeps on teetering.