Prudence and virtue do not always receive their just desserts. Earlier this year, the prospects for the euro area's economy seemed, if not bright, then less dim than for some other parts of the rich world. High oil prices and scarcer credit were bigger worries for gas-guzzling, debt-ridden America than for the high-saving, fuel-efficient countries of continental Europe.rnThings have turned out a little differently. America's economy has held up surprisingly well so far this year-helped, to be fair, by a big fiscal and monetary stimulus. Meanwhile the euro area, after a strong start, is sailing close to recession, GDP figures due to be published on August 14th are likely to show that the economy stagnated, or perhaps even shrank, in the second quarter. Jean-Claude Trichet, the head of the European Central Bank (ECB), whose rate-setting council meets on August 7th, has cautioned that any weakness is payback for an aberrantly strong first quarter. But the economic rot seems too deep to be fully explained by the euro area's earlier strength.
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