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The fastest stage of growth in the euro area looks to have passed, but momentum remains strong. Uncertainty is being fuelled by protectionism and Italy’s domestic economic policy.

Protectionist measures may, at worst, significantly dampen global economic growth. This effect could prove all the more substantial if confidence is weakened and investment is held back.

In the euro area, labour market participation among the working-age population has caught up with that of the United States. Yet a decline in the participation of especially young people remains a cause for concern in both regions.

There are more question marks over monetary policy normalisation than there are over traditional monetary tightening.

The ECB’s Expanded Asset Purchase Programme has recently raised TARGET2 balances, but the reason for the increase is now different than during the sovereign debt crisis.