The Irish programme is well on track, while the Portuguese programme is still in an early stage. The situation is more complex in Greece, where despite substantial progress strengthening of the programme is needed.

The euro area's recovery from the deep 2009 recession remains on track. But growth is expected to slow down and will remain uneven across Member States. Risks surround this scenario, not least those related to unrest in the Middle East and North Africa and its negative impact on oil prices. This Quarterly Report studies oil price shocks through simulations using the Commission's "QUEST model". They show that the underlying causes of oil price shocks matter for economic activity. While oil price increases generally damage growth, increases driven by higher demand tend to be less negative for growth than those driven by lower supply. Recently, both supply disruptions as well as higher world demand for oil appear to be at work.

Finally, this Quarterly Report investigates progress made with respect to the repair of balance sheets of euro-area households and non-financial corporations. Since the crisis, the euro-area private sector has strengthened its balance sheet through cautious investment and spending. Households and non-financial corporations have also improved their financial position in a qualitative way by rebalancing portfolios towards less risky assets such as deposits. Compared to the US, the euro area's household sector's balance sheet looks strong. By contrast, corporate balance sheets are likely to adjust further in the medium term.

Full report