The Conference Board Economics Watch^® - European View

While the big bazooka is out, some targets may still be missed

• Leading economic indexes for the Euro Area and member states mostly stabilized in the fourth quarter, though they remain negative
• The fourth-quarter contraction in GDP at −0.3 percent could turn out to be the only negative quarter for the Euro, steering it away from a recession, as technically defined
• While the European Central Bank (ECB) massively shored up banks’ balance sheet, measures such as making it lender of last resort remain off the table
• Policy makers continue to “muddle through” with moderate reform measures, although the odds for a positive outcome are improving
• Most troubled economies struggle to combine short-term measures to contain the financial crisis with fundamental reforms to reboot the real economy
• Most troubled economies lag behind in productivity and need to balance cost management and innovation to regain competitiveness