Despite geopolitical tensions, the outlook is favourable in most economies and financial market conditions are very relaxed, reflecting a reduced perception of risk. Buoyed above all by expanding domestic demand, GDP growth is picking up in the euro area as well; the risks of deflation have disappeared. Excluding the most volatile components, price increases remain low at just over 1 per cent.
In some cases, also direct transfers to small firms or independent contractors are helping them survive the crisis, without the commensurate build-up of debt levels. Second phase: …and exiting it All of us are looking forward to the moment when lockdown-measures can be eased. However, we should not underestimate the challenges associated with this exit.