Fourth, in this context, a correction in the worldwide risk premia, particularly in the bond market seems now more absorbable. Financial conditions may nevertheless deteriorate suddenly, due to developments in the US or emerging economies’ or to geo-political risks that can trigger spikes in a situation of prolonged low volatility. Fifth, resuming real economic convergence among member countries is vital for the euro area.
This is the next fundamental challenge and it will require more structural and institutional reforms both at national and European levels. A broader and more consolidated recovery The euro area has now been expanding for 17 consecutive quarters while business confidence is at a decade high.