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The euro zone may be tipping back into recession, but the New Zealand economy should come out the other side unharmed, according to the chief economist of Standard and Poors.
Paul Sheard told TV ONE's Breakfast, as long as the euro zone does not spiral out of control, the major global economies should be fine.
"The euro zone is a major part of the global economy, and the fact that it's slowed and is tipping back into recession or course will have some affect on demand, export demand for the rest of the world - including for New Zealand," he said.
"But as long as the crisis in the euro zone doesn't develop into a fully-blown crisis - you know, a break up of the euro zone - something that's starting to look and feel a bit like the 2008-9, then I think the New Zealand economy and Australian economy, and the other major economies should be able to squeak by."
But the region still has a long way to go, he said.
"I think they're grappling with the issues, very much so. The euro zone issues I think are going to carry on for quite a long time - there's really no easy way out here."
Though the euro zone leaders seem determined to hold the single currency together, Sheard said some tough moves need to be made.
"That means making some very difficult steps of so-called fiscal union, banking union, strengthening the economic union and ultimately the political union."
He said the region may back off on austerity measures, which have not been able to stoke economic growth.