FXstreet.com (Barcelona) - A deal for Greece and an agreement on banking supervision were both reached this week capping off a rare spell of good fortune for the beleaguered region note Brown Brothers Harriman analysts.

Whilst they acknowledge that it wasn´t full banking union and a common deposit insurance scheme was not included, it is a huge step forward and perhaps just as importantly acted as defiance to the loud calls and warnings that EMU break up was imminent.

On the economic front however, news has not been as glossy despite some efforts. They write, “It strikes us as a bit misleading to talk about the euro zone composite December flash PMI at a nine-month high. It stands at 47.3. This is still in contraction mode. Preliminary details on Germany and France are available. The German composite did edge back above 50 to 50.2 for the first expansion since April, but the manufacturing sector unexpectedly weakened further (46.3 vs. 46.8). The strength was in the service sector (52.1 vs. 48.0). For its part, France showed improvement in both gauges, but it is still looking at a strong economic drag. Manufacturing edged to 46.3 from 46.2. The market had expected a stronger gain. Recovery in services was more pronounced rising to 47.8 from 45.7.”