Grant Thornton New Zealand partner Murray Brewer said the latest Grant Thornton International Business Report, ''The Future of Europe'', continued to underline problems in the debt-laden euro zone.
While New Zealand businesses could continue to diversify foreign export markets into countries such as China, they had to be wary further European destabilisation could ''drag us back from the fragile recovery we currently have''.
''A word of caution is to not become too stretched gaining exposure in these growth markets as any financial earthquakes in any parts of the European economy will create aftershocks for the New Zealand economy,'' he said.
While New Zealand's debt to gross domestic product (GDP) appears exemplary at 35.9% compared with European countries ratios well beyond 100%, a separate report from the International Monetary Fund yesterday raised concerns about household debt and lack of savings.
While economic recovery had begun, boosted by increased construction activity, growth was ''likely to remain modest'' being offset by the drought, high New Zealand dollar and budget deficit reduction.
''New Zealand's large net liabilities reflect historically low household savings rates and a structural savings-investment imbalance,'' the IMF directors' report said.
Mr Brewer said while the New Zealand economy ''kept warm under a safety blanket'' of Asian growth, the dangers of Europe should not be forgotten.
Because the European countries introducing the heaviest austerity programmes were starting from a relatively high level of debt and the negative impacts of cuts were large, their debt-to-GDP ratios seemed set to rise for some time, Mr Brewer said.
The report highlighted Greece and Ireland were ''off the critical list but remain in intensive care'', while Cyprus was ''on oxygen'' and Spain had ''cripplingly high'' youth unemployment rates and overall unemployment of 27.6%.
Debt mountains
Net government debt to GDP around Europe:
Greece: debt up from 165% in 2011 to 181% this year.
Spain: debt up from 57% in 2011 to 84% this year.
Portugal: debt at 119%, Ireland,107%, and Italy 104% set to continue to climb.
France and United Kingdom both lost AAA credit ratings.
New Zealand, 35.9% in 2012.
Source: Grant Thornton
