CONTENTS

EDITORIAL
ECONOMIC AND MONETARY DEVELOPMENTS

The external environment of the euro area
Monetary and financial developments
Prices and costs
Output, demand and the labour market
Fiscal developments
Eurosystem staff macroeconomic projections for the euro area
Exchange rate and balance of payments developments

Boxes:
1 Prediction of future oil prices
2 Risk aversion and developments in monetary aggregates
3 Saving, financing and investment of euro area households and non-financial corporations in 2003
4 Financing conditions of non-financial corporations in the euro area
5 Liquidity conditions and monetary policy operations from 11 August to 8 November 2004
6 Recent trends in implied bond market volatility
7 Competition and price developments in the euro area electricity and gas markets
8 Possible impact of the removal of trade quotas for textiles and clothing
9 Good standards for compiling and reporting government finance statistics
10 Comparison with the ECB staff macroeconomic projections of September 2004
11 Forecasts by other institutions 78

EURO AREA STATISTICS
Chronology of monetary policy measures of the Eurosystem
The TARGET (Trans-European Automated Real-time Gross settlement Express Transfer) system
Documents published by the European Central Bank since 2003

GLOSSARY