besThe euro zone’s “softly,”approach to the financial crisis is not working. The economy is sinking into deflation, dragged down by a zombie banking system and spiraling government debt. It is slipping back towards recession. A future break-up of the euro zone remains a potent threat. Policymakers can ill afford to keep kicking the can down the road. The bailout earlier this month of Portuguese lender Banco Espirito Santo was a sharp reminder to investors the euro zone was not out of the woods by a long stretch. The root causes of the crisis have not been tackled. High unemployment, chronic underinvestment, poor productivity and falling competitiveness continue to hamper recovery. Banks saddled with toxic loans and tightening capital requirements are starving the economy of much-needed finance. Governments battling burgeoning budgets with tough austerity policies pose a drag on growth. More