In the aftermath of the Great Recession of 2008–09, there were serious concerns about the fragility of euro area government finances. Fathom uses CDS spreads to calculate the market-implied probability of a euro area sovereign defaulting on its debt. These proprietary indicators were broadly unchanged in February and, with the exception of Greece, remained below 10%. This represents a vast improvement relative to levels seen through 2011 and into 2012 at the height of the euro area crisis, and can be attributed to reductions in government budget deficits. Refresh the chart in your browser | Edit chart in Datastream However, declining budget

Fathom retains a pessimistic view of the euro area’s long-term prospects, unless progress is eventually made towards transforming the currency bloc into a fully-fledged fiscal union. There are, however, tentative signs of progress in this regard, with President Macron of France proposing a series of reforms to address some of the euro area’s structural flaws. In any case, Fathom acknowledges that the near-term outlook is far brighter, with the union’s strong cyclical upswing expected to continue this year. In few places are the short-term signs more encouraging than in Germany. On a calendar-adjusted basis, its economy grew by 2.5% in