When assessing the euro area economic outlook, three criteria are of particular relevance in the current juncture. First, how much does the euro area banking sector still rely on central bank liquidity support measures? And second, can we be confident that private sector domestic demand can contribute to a sustained economic recovery? And third, what are the implications for price stability against this background?
In what I will present to you I will argue that there are some good news when assessing these two questions. First, money market activity in the euro area improved which has allowed the ECB to withdraw some of the liquidity support.