After a two-year siesta, the euro- zone is back in the financial markets’ firing line due to stagnating growth, low inflation, budget problems in France and Italy and rising political risk in Greece, where the bloc’s debt crisis began in 2009.

This is not euro crisis 2.0, at least not for now. The bond market is nervous but not seething with contagion as it was in 2010-12.

This week’s global market sell-off was provoked by weak US and Chinese data, adding to concerns about a global slowdown.

But overlapping factors have rekindled anxiety about the eurozone’s stalling recovery amid rising political tensions both among its leaders and between economic giant Germany and the European Central Bank. In fact economists and investors are concerned Germany is pushing the wrong austerity recipe for its own and other eurozone countries’ economic problems, depressing demand and neglecting sorely needed public investment.

The crisis has not yet been permanently and sustainably overcome

Meanwhile the United States, IMF and others are worried that the European Central Bank’s monetary policy easing may be too little and too late, and that it may lack the political support to take bolder action.

At the same time a clash between the EU authorities and France and Italy over their 2015 budgets is about to come to a head, with Paris and Rome resisting peer pressure to cut their deficits. And Greece’s politically motivated dash for a premature exit from its 240 billion euro bailout programme has raised market doubts about its ability to fund itself without external aid and risks of an early election bringing radical leftists to power.

“The fear is back,” a senior EU diplomat said. While traders are no longer speculating on a possible breakup of the eurozone, “any thought that the crisis was over has gone”.

German Chancellor Angela Merkel told Parliament in Berlin yesterday that the euro zone must not drop its guard.

“The crisis has not yet been permanently and sustainably overcome because the causes, regarding the set-up of the European economic and currency union and the situation of individual member states, haven’t been eliminated,” she said.

Merkel made no mention of international pressure on Berlin, underlined in a US Treasury report to Congress on Wednesday, to do more to revive growth, saying: “We can show in Germany that growth and investment can be strengthened without abandoning the path of consolidation.”

Merkel’s government is focused on achieving a balanced budget in 2015 for the first time since 1969, and determined not to be blown off course by demands for a big public works programme.