Budgetary consolidation continues to be a matter of concern, with a view to sufficient budgetary flexibility over the cycle, in line with the Stability and Growth Pact requirements. Appropriate wage developments are another essential ingredient of an employment-friendly policy mix. It is therefore imperative that the social partners continue to pursue a responsible course in line with the general principles set out in the previous Broad Economic Policy Guidelines. The combination of low inflation and reassuring wage and budgetary prospects provides a favourable environment for monetary conditions conducive to growth and employment. However, structural policies have also an important role to play since they reinforce competitiveness and increase the job-content of growth.
Improvements are necessary in the operation of the labour, product, services and capital markets.