After an extended weekend of fun and frolic due to the excitement of the English Premier League and the battering by the Aussies on the hapless Indians in the cricket match, yours truly is back expressing the views making rounds in the markets. While driving down to the office today on this chilled Monday morning, the denizens of the city were seen warming themselves around fireplaces with a hot topic for discussion-increment in the load-shedding schedule from today to 14 hours. While this increment will be a blow to the economical aspects of the nation, a different fear has enveloped the European shores and the fear is likely to get worse as time passes by.

The cometh of the New Year brought a new burst of optimism, even in as troubled a place as the euro area. Equity markets have been a bit cheerier, helped by better jobs and output figures from across the Atlantic. The 498 billion euro that banks were able to borrow cheaply for three years from the ECB in December has helped to settle nerves. The news of the economy on the whole has also been a bit better. A closely watched index of business activity, based on survey of purchasing managers surveys across the zone, has risen for a consecutive second month. The German economy has stayed resilient despite troubles on the EU’s southern region. It grew by 3% in 2011, according to figures from the statistics office this week. Business confidence perked up in the last two months of the year on the gauge published by Ifo, a Munich research group. Unemployment fell in December to 6.8% the lowest level since 1991.

Yet, economists opine that the figures have not been so perky as to suggest the euro-zone economy will avoid recession. Analysts have forecasted the German GDP will probably shrink in the last quarter of 2011. French GDP was flat, says its central bank. Add in the woeful economical situations of Italy, Spain and Greece, and we get a euro-zone GDP figure falling by 0.3-0.4%. The bright start to the year might mean that the current quarter is no worse than the previous one, but much will depend on whether financial markets remain calm. With so much obstacles down the road that could go wrong, the chances of that are slim.

Europe has been walking a dangerous line ever since the sovereign debt crisis stated making the rounds. The year 2012, will be an important year for the Euro zone as it puts forward every measures to stem the degrading conditions. As for me, I am off to the markets to buy candles and an inverter to light the darkness of the night. After all, darkness will envelop the city and we should take precaution against it!