A fresh round of lockdowns means a difficult winter lies ahead for the euro area. But three factors caution against excessive pessimism. At the end of the summer, things were looking up for Europe. COVID-19 was largely under control and economic indicators were surprising on the upside. Since then, a loosening of restrictions on economic and social activity and the onset of colder weather have allowed the virus to return with a vengeance. In most countries, daily new cases are now above—and in many cases well above—previous peaks (Display left, below). Thankfully, the increase in new cases has not yet been ... (full story)