Europe remains in the grip of the coronavirus pandemic. After strong growth in the third quarter of 2020, economic activity contracted again in the fourth quarter as a resurgence in the number of cases, together with the appearance of new, more contagious strains of the coronavirus, forced many Member States to reintroduce or tighten containment measures. With those measures still in place, the EU and euro area economies are expected to contract in the first quarter of 2021. Economic growth is set to resume in the spring and gather momentum in the summer, however, as vaccination programmes progress, containment measures gradually ease, and the global economy improves. The euro area and EU economies are expected to reach their pre-crisis levels of output earlier than anticipated in the Autumn 2020 Economic Forecast, largely because of the stronger than expected growth momentum projected in the second half of 2021 and in 2022. The economic impact of the pandemic remains uneven across Member States, however, and the speed of the recovery is also projected to vary significantly. Risks surrounding the forecast are mainly related to the evolution of the pandemic and the relative success of vaccination campaigns. NextGenerationEU, the EU's recovery instrument of which the centrepiece is the Recovery and Resilience Facility (RRF), could also fuel stronger growth than projected, since the envisaged funding has - for the most part - not yet been incorporated into this forecast.