Press Release: Early signs of improvement but euro-area economy is still in contraction mode

The euro-area economy is still deep in recession territory but the EU's strong and coordinated policy response is providing tangible support to economic activity and sentiment indicators and financial markets have started to send some tentative signs of improvement, the Quarterly Report on the Euro Area showed. The QREA provides a preliminary assessment of the effectiveness of banking support measures implemented by Member States and discusses challenges ahead, particularly in terms of debt sustainability. A first focus section assesses the impact of the economic and financial crisis on potential growth. A second focus section discusses the economic and budgetary challenges posed by population ageing in times of crisis.

Most financial markets were showing encouraging signs of stabilization although conditions remain