As the new year begins, China is rattling the world’s financial markets. No longer can the world’s second-largest economy be relied upon as a motor to drive global economic expansion. That isn’t good news for growth anywhere in the world, let alone for Europe, where the economy needs all the help it can get.

True, the eurozone has been emerging from the economic doldrums. New figures released Thursday by the European Union’s statistics agency show the eurozone’s unemployment rate has fallen to its lowest level in four years.

But what’s perhaps more remarkable—and worrying for European policy makers—is how slowly growth is recovering even with the powerful tailwinds of a weak euro, rock-bottom interest rates and very low energy prices. Eurozone growth in 2015 was estimated at 1.6% by the European Commission in November, and is forecast to creep up to 1.8% this year and 1.9% in 2017.

One small positive note for Europe in China’s weakness might be a further spur in the dollar’s value, which rose in the past week recent days to its highest level since 2002 against a basket of commonly traded currencies.

Already, the strengthening of the dollar against the euro has been a godsend for some European companies, helping them to increase their global market share.

Despite this, there are underlying weaknesses in the eurozone economy that have been masked by the easy-money policies of the European Central Bank, some of which help to explain why the recovery has been so hesitant. The probability of Greece being ejected from the currency union, which spiked in 2015, has faded, but plenty of other economic concerns remain.

Policy makers privately complain that the momentum toward the structural economic reforms still needed to build a platform for longer-term growth has ground to a halt.

Furthermore, they say underlying improvements in government finances have stalled. Headline budget deficits have fallen but that is due largely to the pickup in growth and the low interest rates that, thanks to the ECB, governments now pay to borrow.

The budget picture is a two-edged sword for the eurozone economy. Because fiscal policy is relatively relaxed—and may become more so with increased government spending on swelling numbers of refugees—it should be helping current growth. But it may reduce the future scope for fiscal action come the next downturn.

In many countries, heavy debt burdens, both private and public, are restraining growth. Economies can grow or inflate their way out of debts; often they have done both. The eurozone is doing neither.

Growth in the eurozone’s nominal gross domestic product—a measure that adds real growth and inflation—was less than 2% in 2015. That might not improve much this year: In an assessment published Thursday, economists at Citi Research forecast real growth at 1.7% and inflation at 0.5% for an expected increase in nominal GDP of just 2.2%.

That slow growth in nominal GDP makes it hard for private debtors to shuck off debts. While the banking system is in better shape overall than at the height of the crisis, there are pockets of fragility that bother policy makers, and not only in crisis-hit countries such as Greece, Cyprus and Portugal. Nonperforming loans in eurozone banks are around €1 trillion ($1.08 trillion), in a banking system with total assets exceeding €20 trillion, but some 30% of these are in Italy, where they make up around an eighth of total bank assets.

“Nonperforming loans in Italy have reached systemic levels hindering the recovery,” the International Monetary Fund said in its 2015 assessment of the Italian economy. It said the problem is particularly acute in the country’s smaller banks.

Italy has in recent weeks underlined the potential for weak banks to cause political trouble. A rescue of four small banks there in November cost €3.6 billion and wiped out shareholders and junior bondholders, many of them small investors who took to the streets in protest against the government of Matteo Renzi. This year tougher European Union rules were introduced aimed at reducing taxpayer bailouts, but that could see senior bondholders and even large depositors suffering losses if banks fail.

Indeed, one theme to which economists return repeatedly for the coming year is politics. Economic integration is threatened by terrorism spinning out from the Middle East and by the refugee crisis, which has encouraged countries such as Germany, Sweden and Denmark to reimpose border controls. Antiestablishment political parties have gained ground in some countries, with one taking power in Poland last year.

Political uncertainty is high in Spain following an inconclusive election last month, and is likely to continue in Portugal and Greece. In 2017, elections are due in France and in Germany, where Chancellor Angela Merkel is under political pressure because of her refugee policies. A British referendum is likely this year on whether the U.K. should stay in the EU. A vote to leave would increase uncertainty about prospects for both the British and eurozone economies.

All being well, the European economy should stumble through 2016 in reasonable, even slightly improving, shape. But most of the risks appear to be on the downside.