Second, it is true that we have seen significant improvements in market access and funding costs during recent months. However, signs of fragmentation between the so-called periphery and other countries of the euro area are still evident. That is, financing conditions for sovereigns, banks and corporates continue to diverge along national borders.
Third, in many parts of Europe the necessary deleveraging process still has to continue. The corporate and private household sectors in some European economies are still riddled with debt from previous exuberance. Likewise, public deficits and sovereign debt levels are uncomfortably high in many countries. Finally, growth, when measured on an annual basis, in the euro area remains subdued.