• Countries under pressure have appropriately front-loaded fiscal adjustments, reform efforts must be unrelenting
• Does not see second round inflation effects, euro zone monetary policy can afford to stay relatively accomodative
• ECB may need to extend further into future its policy of unlimited liquidity for some refi operations
• Making euro zone bailout fund-commitments operational, by filling in still-missing specifics, now essential
• Sees emerging Europe growing 4.3% in 2011, 2012 versus 4.2% in 2010
• Major immediate term risk stems from large debt rollover needs in euro area periphery sovereigns, banks (Oh-eh)
• Euro zone crisis remains key risk to emerging Europe, urges fiscal consolidation
• Public debt sustainability vital to breaking negative feedback loops between sovereign and banking sector
• Urges emerging European central banks to stay on “high alert” for second round commodity price impact
• Our overarching concern is whether recovery, investment can proceed despite persistent weaknesses in European banks
• Sees emerging Europe CPI averaging 7.3% in 2011, 6.2% in 2012
• Many euro zone countries have yet to demonstrate their resolve to put banking sector on a stronger footing
• UK economy faces considerable short-term uncertainty