...Gradual Recovery: Fitch Ratings expects market conditions across the eurozone to continue the gradual recovery observed since mid-2013. The languishing periphery is finally expected to return to positive growth in 2014, accelerating further into 2015. This, together with leaner cost structures after cost-saving measures in recent years, will translate into a gradual improvement in European corporates' cash generation and margins in 2014 and 2015, albeit from relatively weak 2013 levels. Downside Risks Remain: Rating headroom will remain tight in the near term, though improving, and even a slight delay in the expected economic recovery could hit already stretched corporates hard. Weaker growth, whilst not our current expectation, may affect profitability as many companies have already cut costs to the bone in recent years, leaving little headroom to absorb further significant shocks. Emerging-Market Uncertainties: The differential in growth between emerging and developed markets has narrowed...
