Preparation of Eurogroup and Informal Economic and Finance Ministers Council, Prague, 3 and 4 April 2009

Ministers will discuss the economic situation, including financial market developments. The preparation of the G7 and Washington spring meetings will also be discussed. The economic situation remains exceptionally uncertain and the outlook weak. Data released since the January 2009 interim forecast show that the downside risks identified at that time have started to materialise. On the external side, world trade is decelerating at a rapid pace while industrial production collapsed at the turn of the year. On the domestic side, hard data continues to paint a bleak picture. The latest soft data has however been more mixed. Nonetheless, the various indicators remain at a level which is consistent with yet another significant fall in euro area GDP in the first quarter of 2009. In financial markets, conditions have improved somewhat in recent weeks. However, it remains to be seen whether this improvement will be sustained or if it is just temporary. In several market segments stress remains high and the overall system remains vulnerable to the rapidly deteriorating conditions in the real economy.

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