Macroscope | Is it going to be game over for the euro this year?

Things seem to have gone very quiet around the euro currency in recent months. It appears to have found some much needed stability after years of extreme market mayhem with its very survival on the line at times as the euro zone has lurched from one crisis to another.

This new-found stability is deceptive. The currency is not out of the woods in terms of deep-rooted economic and political problems, which threaten to resurface as the euro zone stands at the threshold of another global economic slowdown. It could mark the quiet before the storm.

It is an accident waiting to happen. If the euro zone heads into another downturn, it will only heighten frictions caused by the growing wealth gap between prosperous Germany and the economically distressed nations of southern Europe, especially Greece, Spain and Portugal.

Damage caused by years of chronic austerity, rampant unemployment and crippling debt threaten to pull European Monetary Union (EMU) apart at the seams. If the euro zone slips back into recession and employment conditions worsen, those tensions will boil over again very quickly.

READ MORE: Euro currency is fatally flawed and its endgame has already started

In the last two years, euro-zone economic confidence signals have been surprisingly upbeat, but not anymore. The euro zone’s bellwether economic sentiment index deteriorated sharply in January, pulled down by mounting pessimism being felt in industry, services and among consumers. It spells trouble ahead for euro-zone growth.