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COM (84) 362 
 
 
 
Vol. 1984/0 155 
  
 
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concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
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In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Econom ic 
Communit y and the European Atom ic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
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file have been declassified in conformity with Article 5 of the aforementioned regulation.  
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februa r 1983 über die Freigabe der historischen Archive der Europäischen  
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983,  
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003  
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COMMISSION O F THE EUROPEAN COMMUNITIES
COM(84) 362 final
Brussels, 29 june 1984
THE MEDIUM TERM ECONOMIC DEVELOPMENTS IN THE COMMUNITY :  
PERSPECTIVES AND ACTIONS
Communication from the Commission to the Council
COM(84) 362 final

-1-
1. The economic outlook for the Community in the medium  
term is not very bright, despite recent signs that the econo­
mic crisis, which began in the mid-1970's, is growing less  
acute- In the United States, a vigorous economic recovery is  
under way, accompanied by a substantial decline in unemploy­
ment; in Japan, the rate of activity is such as to guarantee a  
continued high level of employment.
The rest of this decade may well see a further decline in the  
relative economic power of Europe, and this could seriously  
affect employment and standards of living.
There are a number of causes for concern :  markets and econo­
mic structures are excessively rigid; production costs are  
high, and undermine competitiveness; productive investment is  
inadequate; productivity gains are slowing down; Europe is 
backward in the development of new technologies; the results  
of research are not being effectively exploited; there is  
resistance to change; and the economic policy stances adopted  
are not always suitable.
The Community's loss of momentum is no doubt to some extent  
due to the two oil shocks, and to the unstable international  
monetary and financial situation - which the Community has in  
fact dealt with fairly well; but it would be pointless to con­
centrate entirely on such factors, while ignoring the internal  
causes of the problem.
2. The Community institutions have a duty, in their efforts  
to lay the foundations for a fresh drive in the development of  
Europe, to take steps to halt the progressive weakening of  
economic structures.  Their determination is the more impor­
tant as reactions to the crisis have so far been largely unco­
ordinated .

- 2 -
The Commission's proposals for the rapid elimination of tech­
nical barriers, tax barriers and other obstacles to the emer­
gence of a genuine common market bear witness to the key  
importance it attaches to developing the European dimension of  
economic life as an essential support for restructuring.  The  
removal of barriers is vital to enable Community firms not  
only to take advantage of economies of scale in production,  
investment, research, marketing and all the areas where the  
competitiveness of their products is determined, but also to  
increase the pace of technological development. An integrated  
financial market is necessary to draw efficiently upon the  
Community's capacity for saving and lending unconstrained by  
present partitioning.
Unlike the United States and Japan, Europe has no genuinely  
unified monetary identity, and this seriously hampers  
Community firms in their efforts to catch up with those coun­
tries in the numerous areas where they have been outpaced.  
The development of the European Monetary System is the key not  
only to fulfilling this vital requirement, but also to provid­
ing sufficient autonomy in an international context to ensure  
that monetary shocks such as have been experienced in the not  
very distant past are buffered or even neutralized.
3. But without the support of coordinated economic poli­
cies, closer integration of European markets cannot on its own  
lead to vigorous and balanced economic growth.
The views of the Member States' governments have been tending  
to converge on this point over the past few years. In parti­
cular, stability and external equilibrium have become priority  
objectives regarded as the necessary conditions for any impro­
vement in employment. On the whole, Member States have
·/·

- 3 -
adopted tight monetary policies and are concentrating on redu­
cing the structural component of public deficits. Policy must  
remain sufficiently strict, once growth has got under way  
again, to dampen inflationary expectations and thus ensure a 
further balanced development. Thus a higher degree of conver  
gence between economic and social fundamentals, within the  
Community, could be obtained ensuring also greater monetary  
stability.
4. Even if these conditions are met, the employment situat­
ion may still be disquieting :  in view of present population
trends and the rising rate of female participation in the  
labour force, the problem is unlikely to be solved in the near  
future. Economic policy in all the Member States will have to  
be tailored to reconciling economic efficiency with better  
labour market equilibrium. If growth is to lead to net job  
creation, a number of essential conditions will have to be  
fulfilled :  an improvement in the competitive capacity of  
firms, some readjustment of the distribution of factor  
incomes, increased incentives for investment in capital widen­
ing (and not just, as in the past, capital deepening), and an  
improvement in the tax, administrative and general environment  
for business.
If nevertheless the aim of net job creation is not achieved,  
the authorities will have to consider measures to adjust work­
ing time in such a way as to promote employment without howe­
ver impairing competitivity.  At all events, economic restruc­
turing can be socially acceptable only if back-up measures are  
taken to attenuate hardship and to encourage reconversion so  
as to minimize the risks of additional unemployment.
·/·

- 4 -
5. The clear conclusion to be drawn from the above remarks  
is that the priority must be to restore a satisfactory employ­
ment situation.
There is one major condition that must govern any steps taken  
to achieve this aim :  the results achieved so far in stabiliz­
ing the economy must be consolidated, and in some member coun­
tries further progress towards stabilization has to be made.  
The Member States' monetary and fiscal policies will have to  
be governed by this requirement, although sufficient room for  
manoeuvre should be left to allow for real expansion.
An improvement in the development of investment will provide  
the driving force towards a higher level of employment; in  
particular, investment should develop following the achieve­
ment of more balanced relative costs of factors of production,  
and concentration on more technological advanced techniques.
The background to these efforts must involve an increasing  
pace of structural economic adjustment, based on more active  
competition, and greater flexibility in the markets for goods  
and services, especially the labour market.
The task of the Community institutions will be to ensure the  
highest possible degree of economic convergence, both through  
the coordination of the Member States' economic policies and  
through the specific application of Community instruments;  
this is a necessary condition to warrant the success of the  
efforts undertaken as well as an equitable distribution of  
their benefits.
6. The pursuit of these aims within the framework of a  
medium-term economic policy programme drawn up using the tra­
ditional methods and applicable over a set period of five  
years, would pose a number of problems.

- 5 -
The experience of the Fifth Programme, which was adopted in  
1982, was disappointing. The analysis and diagnosis of the  
economic crisis gave rise to much more divergent views than at  
present; in particular, the relative priorities attached to  
the various economic policy aims, and views on the appropriate  
timing of measures to be taken, are now much more similar. ,It 
has frequently been extremely difficult to reach any consen­
sus. The consequent need on numerous occasions to resort to  
compromise solutions has not made for clear guidance on the  
appropriate policy stance for the Member States and for the  
Community.
But circumstances are more favourable at present, as there is 
now a greater similarity between Member States's views on the  
policies that should be followed. Nevertheless, it will still  
be very difficult to reach a consensus on an overall response  
to present economic problems. What is more, in view of  
serious economic difficulties, the Community's aims must be  
so ambitious, that the joint approach to restoring a healthy  
economic situation must, once it has been defined, be trans­
lated into policy in firm and precise terms.
7. In the circumstances, and in view of the need to reach  
practical conclusions for policy in all the major areas where  
action is deemed necessary, the practice of drawing up a  
medium-term programme every five years to cover the entire  
range of issues is not thought appropriate.
In the Commission's view, the best response to the require­
ments of the present situation would be a set of jointly  
agreed medium-term national and Community measures to be work­
ed out and implemented in a continuous process. Such a res­
ponse is to be preferred because it ensures greater flexibili­
ty, which is a vital necessity in the circumstances. In addi­
tion, it is perfectly consonant with the spirit of Article 6  
of the Council Decision of 18 February 1974.

- 6 -
Thus, the following procedure could be followed for examining  
medium-term economic policy problems :
(i) First of all, the major steps that need to be taken to  
arrest the Community's economic decline should be jointly  
identified, with special attention to remedying the employment  
situation. The most important subjects to be dealt with here  
include investment, hightechnology,  public finance, competi­
tiveness and market flexibility. These subjects are included  
in the work programme proposed by the Economic Policy Commit­
tee in the opinion which it recently presented to the Council  
and to the Commission and which the latter has accepted.
(ii) Next, the Commission, on the basis of the preliminary  
draft prepared by the Economic Policy Committee, would esta­
blish draft guidelines on practical action to be undertaken on  
each agreed subject, and would forward this draft to the Coun­
cil, indicating those points on which it departs from the pre-
.  liminary draft of the Economic Policy Committee.
8. This is the way in which the Commission intends to pro­
ceed in examining medium-term economic policy in the Communi­
ty, and which it considered necessary to communicate to the  
Council.
Given the severity of the challenges the Community has to  
face, the Commission will undertake without delay, in close  
collaboration with the Economic Policy Committee, the work  
necessary in order to specify rapidly the first guidelines for  
practical action.