The sovereign debt crisis in Europe has intensified, conditions in international financial markets have tightened, and risk aversion has risen. The recession in Europe is now expected to be deeper and longer than previously anticipated.   The Bank continues to assume that European authorities will implement sufficient measures to contain the crisis, although this assumption is clearly subject to downside risks.
  In the United States, the rebound in real GDP during the second half of 2011 was stronger than anticipated. However, the Bank expects the recovery will proceed at a more modest pace going forward, owing to ongoing household deleveraging, fiscal consolidation and the spillovers from Europe.   Chinese growth is decelerating, as expected, toward a more sustainable pace.