Press Release: Quarterly report on the euro area: headwinds gather strength

The economy has to contend with strengthening external headwinds but the euro area is showing resilience helped by strong growth in emerging markets, showed the latest Quarterly Report on the Euro Area (QREA). The most recent hard and soft data were consistent with the growth forecast announced on 21 February. The Report also looked at why growth and inflation have become more stable in industrialised countries in recent decades, a phenomenon economists refer to as the 'Great Moderation'. It showed that labour market reforms have succeeded in increasing employment levels but that there is a growing divide on the labour market, with the burden of reform falling on those not subject to standard labour contracts. It also showed that the economies of the Member States are reacting differently to the ongoing inflationary pressures. Finally, in its focus section, the QREA argued that East Asia could take inspiration from the European economic and monetary experience to the benefit of the region and indeed the whole world.