The economic outlook for the Euro Area shows another quarter of small contraction as indicators point to continued uncertainty and fiscal tightening dragging on growth, though a weaker euro should help exports. Corporate investment never rebounded after the crisis and changing inventories are already very negative, so next year's outlook depends on correcting budget and current account imbalances across countries despite the ECB's proactive measures which have not equalized financial conditions.

1. Economic outlook for the Euro Area
Matthieu Grouès,
C.I.O.

2. Indicators point to another quarter of small contraction

3. Uncertainty has been on a rising trend

4. The recession owes as much to uncertainty than to fiscal tightening

5. Fiscal retrenchment will remain a drag on growth

6. The Euro has not been that weak for ten years

7. This should help exports

8. Corporate investment never really rebounded

9. The change in inventories is already very negative

10. What to expect next year?

11. The euro area crisis is as much a crisis of budget
balances as of current accounts

12. Some countries have corrected both imbalances

13. Some have had more mixed results

14. The ECB has been very proactive

15. But there are wide disparities in financial conditions
between countries, hence the last annoucements