The emergence of some signs of vulnerabilities is inherent in any rapid catch-up. In this paper, an attempt is made to put these signs into perspective. First, the European Union's growth performance is recorded using other emerging market countries as comparators and a growth-accounting framework to identify the sources of growth. Second, two growth scenarios that illustrate the range of investment and productivity growth rates under an ambitious income catch-up objective are outlined. Third, the strengths and weaknesses in the region are drawn on the extensive literature on empirical growth equations and using updated cross-country growth analyses. Fourth, the opportunity to supplement domestic savings with foreign savings intermediated through European financial markets is outlined. Finally, the implications of such developments for the International Monetary Fund's surveillance are emphasized.