For European Union policymakers, a combination of soaring budget deficits and feeble economic recovery threatens to make 2010 a year of challenges no less demanding than those of the past 12 months.

EU governments are increasingly recognising that the boost to their economies from fiscal stimulus programmes adopted since last November is likely to fade in the course of next year. But a second round of stimulus packages, apart from being politically controversial in many EU countries, would not be easy to justify from an economic point of view.