Growth is estimated to have slumped further to a meagre ½ per cent in 2003. It should pick up to 1¾ and 2½ per cent in 2004 and 2005 respectively, underpinned by rebounding world trade, improving corporate balance sheets and a supportive stance of monetary policy. However, further exchange rate appreciation could hamper the recovery. Fiscal policy is set to be broadly neutral despite calls for fiscal consolidation. The unemployment rate is expected to peak at 9 per cent in 2004 with inflation remaining subdued. Achieving economic growth on a sustainable basis requires that greater progress be made in implementing the structural reform agenda already laid out and that attention be given to the additional efforts which may be required. The gains from creating a truly integrated and competitive European market, increasing business dynamism, investing in knowledge and innovation and pushing ahead with labour market and pension reforms could be very large....