As previously discussed, looking like deficits high enough for stability and even modest growth, albeit with output and employment at tragically low levels, if they don’t further tighten fiscally.

It didn’t have be this way. They could have increased deficits pro actively vs via austerity.

Also, their ‘automatic fiscal stabilizers’ are very strong and, even if all is left alone, will tend to keep any recovery muted.

EU Headlines
Draghi Says Conditions Considerably More Favorable Than Last Yr
Merkel Takes Swipe at Yen
German Business Sentiment Rose More Than Forecast in January
Ifo Business Climate Index Rises
German Cooperative Banks See Growth Exceeding Government Outlook
France needs time to overtun rampant jobless rate: minister
Monti Says Monte Paschi Bailout Hinges on Bank of Italy
Italian PM under fire over bank crisis
Spain tries to peel back business rules