"We update the exercise we did in May with the new information provided by governments and the European Commission to determine the degree of fiscal drag and the policy stance in the years to come. We find that while the fiscal stance should relax next year, the tailwinds to growth will only be moderate on the back of the lagged impact of fiscal measures taken in previous years. The fiscal drag will reduce from [an estimated] 1.6 percentage points of GDP in 2013 to [an estimated] 1.1 percentage points in 2014. We expect a stronger tailwind in 2015, driven by the lagged drag from austerity in previous years fading, rather than a softening in new austerity measures in 2015 itself."—BofA Merrill Lynch economists Ruben Segura-Cayuela and Laurence Boone
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