The economic recovery in the euro area has accelerated in the course of 2004. During the first two quarters, real GDP rose at an annual rate of slightly over 2 percent, after about 1½ percent in the second half of 2003. For the first time since 2001, overall capacity utilization increased....

Economic activity in the euro area has weakened since last summer. In the second half of 2002, real GDP increased at an annualized rate of around 1 percent only. Economy-wide capacity utilization has further declined and the situation on labor markets has worsened. The increase in consumer...