Krzysztof Bledowski, Ph.D., senior economist
The uneven recession in the eurozone is now coupled with a downturn in the Czech Republic and sharply falling economic activity in Poland. The eurozone's steadily rising current account surplus will be difficult to reconcile with a fast recovery in 2014 based solely on external demand. As households and businesses spend less (save more), output can grow only if governments or foreigners (or both) spend more. Yet these trends are unlikely to hold: the private sector is deleveraging while fiscal authorities shrink budgets. Governments are becoming net savers because the fiscal compact mandates such. Economic Outlook

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