Stock markets up 50%, German rates up, periphery rates down. Risks down for core and periphery countries. Monetary policy very accommodative, being passed through to the real economy "finally". Survey data very strong, hard data less impressive. Recovery weak, fragile, uneven. Unemployment has stabilized but remains very high. Risks to recovery is on the downside. ECB has been given much credit but European leaders should get credit for banking union. All countries need reform; Germany undertook great reform 10 years ago. Reform work not finished. Fiscal consolidation should not be unraveled (full story)