Leading indicators point towards an economic recovery in the EU, encompassing also the vulnerable euro area Member States. In view of the legacy of the crisis, growth is still set to remain moderate, but a gradual easing of the drag related to deleveraging, financial fragmentation, adjustment of external imbalances and uncertainty is already discernable.  Moreover, some external risks remain since emerging market economies are expected to register a moderate deceleration. Also, new geopolitical risks have emerged on the back of tensions with Russia. Against this background, this policy brief will assess the EU's short term prospects as well as the likely drivers of EU growth over the medium to long run. With respect to the short run, the brief will stress that despite the emerging recovery, it would be a mistake to think that the efforts to rebuild the European economy are behind us. Regarding the medium term, the brief stresses the pivotal role to be played by productivity enhancing structural reforms, and assesses the risk of a "secular stagnation" type scenario emerging in the EU.