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Fall Season in the Euro Zone: Calm Before the Storm?

The fall has heralded a period of relative calm in the euro zone, which has been the focus of market worries for much of the past two years.

Yet economists and analysts are warning that the current lull could be followed by a storm later in the year, as problems in the peripheral economies persist. (Read More: UK Banks Must Prepare for 'End of World' Risks: Bank of England .)

"Previous lulls have not lasted for very long, " economists at Capital Economics pointed out in a research note. "There are still few signs of any improvement in the peripheral economies' deep-seated problems and growing evidence that the economic downturn has spread into the core."

Spain, the euro zone's fourth-largest economy, has had the markets' attention for months as speculation about whether it will be the next peripheral economy to ask for a bailout grew. Many now seem to expect a request for a full bailout (Spain has already asked for aid to bail out its indebted banks) between the end of October and the middle of November. If Spain makes a formal request, this would open the door for the European Central Bank to start buying up its bonds — a policy welcomed by markets when it was announced earlier this year.

(Read More: Opposition to Spanish Bailout Waning )

"Markets expect that a request from Spain is around the corner, " Thanos Vamvakidis, head of European G10 foreign-exchange strategy at Bank of America/Merrill Lynch, told CNBC Wednesday.

This week, another European Union summit will start on Thursday. Developments in Spain could overshadow plans to discuss banking supervision and even closer fiscal union for the members of the single currency.

"The euro has been supported by expectations that we're going to get some progress in the EU summit towards bank supervision and perhaps on a fiscal union. We believe we are in a bear market rally. The problems in the euro zone will continue, " Vamvakidis said.

Euro zone economic fundamentals have remained stagnant at best, with the region expected to undergo a mild recession this year, as unemployment hits dangerous levels in several of the most heavily indebted peripheral economies.

There are also concerns about France and Italy, the region's second and third-largest economies, which are both facing slowing economic growth. Italy has been tipped as the next economy after Spain to seek a bailout — and its sheer size could make this even more dangerous for the euro zone, if stronger economies like Germany continue to be on the hook for bailing out the weak.

Some in the weaker economies are expected to continue to protest at austerity measures, while there is dissatisfaction in the stronger about the increasing burden of bailing out the weak.

(Read More: Second Winter of Discontent in Euro Zone? )

"Progress towards banking and fiscal union remains predictably slow, " Capital Economics warned. "Against this background, the crisis looks likely to flare back up over the coming months, further darkening the economic outlook and maintaining a high risk of at least some form of fragmentation of the currency union."

There are still many who argue that Greece will have to leave the euro zone, although these predictions have been around for a while. Capital Economics predicts that Greece will leave within months. On the other hand, economists at Credit Suisse pointed to recent improvements in the country's fundamentals in a recent research note.

(Read More: Greece's Recovery Coming? )

—By CNBC's Catherine Boyle; Follow Her on Twitter @cboylecnbc

Contact Europe: Economy

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