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Most forecasters remain cautious about the prospects for economic recovery in 2010 and 2011, partly reflecting the likely drag on growth of efforts to tighten fiscal policies in order to deal with huge budget imbalances. As well as the high-profile problems in Greece, and concerns about some of the other smaller economies, budget problems abound throughout the region. Even in Germany, the general government budget is expected to record a deficit of more than 5% of GDP in 2010. This month's survey at least suggests that sentiment regarding public deficits has stabilised, with consensus forecasts having remained unchanged in our last two surveys. This applies to projections for both 2010 and 2011. But the expected pace of growth over the next two years appears likely to make significant progress on the budget front extremely difficult.

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