EUROPEISKA GEMENSKAPERNAS KOMMISSION 
Bryssel den 31.05.1995 
KOM(95) 228 slutlig 
Kommissionens rekommendation 
om övergripande riktlinjer för 
medlemsstaternas och gemenskapens 
ekonomiska politik 

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EUROPEISKA KOMMISSIONEN 
Kommissionens rekommendation 
om övergripande riktlinjer för 
medlemsstaternas och gemenskapens 
ekonomiska politik 
utarbetad i enlighet med artikel 103.2 
i Fördraget om upprättandet av Europeiska gemenskapen 
- y) ex -
Innehållsförteckning 
ÖVERGRIPANDE RIKTLINJER FÖR GEMENSKAPENS OCH 
MEDLEMSSTATERNAS EKONOMISKA POLITIK 
1. Inledning 1 
2. Riktlinjer för den ekonomiska politiken 2 
Pris- och växelkursstabilitet 2 
Sunda statsfinanser 4 
Konkurrenskraft 6 
Sysselsättning och arbetsmarknad 7 
II. FÖRKLARINGAR 10 
1. Inledning 10 
2. Nuvarande ekonomiska situation och framtidsutsikter 11 
2.1 Tillväxtutsikter 11 
2.2 Sysselsättningens utveckling 12 
2.3 Inflationens utveckling och budgetär konvergens 14 
3. Politiska målsättningar och risker 21 
4. Politiken på olika områden 24 
4.1 Makroekonomisk politik 24 
4.2 Konkurrenspolitik 27 
4.3 Sysselsättnings- och arbetsmarknadspolitik 29 
A \r 
I. Övergripande riktlinjer för medlemsstaternas och 
gemenskapens ekonomiska politik 
1. inledning 
Sedan sommaren 1994 då de förra övergripande ekonomiska riktlinjerna antogs har den 
ekonomiska tillväxten fått ordentligt fäste i gemenskapen. Såsom nyligen framgick av 
oroligheterna på valutamarknaden till följd av dollarfallet, kvarstår dock fortfarande 
betydande risker och viktiga politiska problem att lösa. För att se till att 
tillväxtmöjligheterna utnyttjas fullt ut för att öka sysselsättningen och förbättra 
konvergensen, måste den ekonomiska politiken på olika områden bemöta de utmaningar 
och ta vara på de möjligheter som den framväxande ekonomiska expansionen medför. 
Föreliggande politiska riktlinjer som utarbetats och antagits i enlighet med artikel 103.2 i 
Fördraget om upprättandet av Europeiska gemenskapen, kommer att bilda en referensram 
för den ekonomiska politiken i gemenskapen och i medlemsstaterna. De bekräftar såväl de 
mål som ställts upp i de tidigare versionerna som Europeiska rådets slutsatser om 
bekämpning av arbetslösheten, särskilt slutsatserna från Essen-mötet som 
rekommenderade ökade insatser inom fem olika områden. Genom att tillämpa dessa 
riktlinjer fullt ut blir det möjligt att förbättra konvergensen och förverkliga de gynnsamma 
tillväxt- och sysselsättningsutsikterna och på så sätt uppnå en betydande minskning av 
arbetslösheten. 
Det finns i dagsläget två politiska problem som borde prioriteras. Först finns det risk för 
att den ekonomiska tillväxtens gynnsamma effekter leder till "anpassningsnonchalans". En 
sådan kan yttra sig som ett svagare intresse - beroende på den cykliska förbättringen av 
budgetunderskottet - för att på ett varaktigt sätt lösa den strukturella finanspolitiska 
obalansen eller, när sysselsättningen börjar ta fart, som en viss motvilja mot att starta och 
genomföra de åtgärder som behövs för att avhjälpa bristerna på arbetsmarknaden. Det är 
viktigt att bestämt motarbeta dessa båda former av "anpassningsnonchalans". 
För det andra har de nyligen ändrade växelkurserna medfört större risker inte bara för 
inflationsspridning utan även för en splittring av den inre marknaden, samt ett ökat hot 
mot de fördelar som uppnåtts tack vare den ekonomiska integrationen. 
Jämviktsrubbningar i växelkurserna kommer att ha skadliga effekter för samtliga 
medlemsstater. Det är uppenbart att om man vill minimera risken för att den typen av 
händelser inträffar måste en av huvudprioriteterna för den ekonomiska politiken vara att 
skapa förutsättningar för växelkursstabilitet inom gemenskapen. 
Föreliggande riktlinjer bekräftar på nytt de politiska målsättningar som fastställdes i 
riktlinjerna från december 1993 och juli 1994, nämligen att det är mycket viktigt att 
gemenskapen och medlemsstaterna omvandlar den nuvarande återhämtningen till en stark, 
bärkraftig, icke-inflationistisk medelfristig tillväxt- och sysselsättningsskapande process, så 
att arbetslösheten minskar på ett markant sätt och den grad av konvergens kan uppnås 
som är nödvändig för att underlätta övergången till fas två i den ekonomiska och 
monetära unionen (EMU). För att uppnå dessa mål krävs en stabil, investeringsfrämjande 
ekonomisk ram på kort och medellång sikt som kännetecknas av 
en penningpolitik som syftar till stabilitet och som inte motverkas av en olämplig 
budget- och löneutveckling, 
fortlöpande ansträngningar som syftar till att stärka statsfinanserna i de flesta 
medlemsstaterna och som är förenliga med de mål som satts upp i 
konvergensprogrammen, 
en nominell löneutveckling som är förenlig med målet om prisstabilitet och som 
samtidigt tar hänsyn till behovet av att öka lönsamheten för de 
sysselsättningsskapande investeringarna. 
En väsentlig komplettering till denna ram utgörs av strukturreformerna avsedda att främja 
medlemsstaternas ekonomiska konkurrenskraft och att fa deras arbetsmarknader att 
fungera bättre. De olika politiska åtgärder som behövs för att upprätthålla en långsiktig 
tillväxt, öka sysselsättningen och förbättra konvergensen skall vara förenliga med 
varandra. 
2. Riktlinjer för den ekonomiska politiken 
Pris- och växelkursstabilitet 
Sedan början av nittiotalet har viktiga framsteg gjorts i gemenskapen och i 
medlemsstaterna för att minska inflationen. Det finns för närvarande nio medlemsstater 
(B, DK, D, F, IRL, L, NL, A, UK) som förväntas få en inflation mellan 2 och 3 procent år 
1996, vilket stämmer överens med målsättningen i 1993 och 1994 års riktlinjer. Finland 
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och Sverige förväntas få en inflationstakt nästa år som ligger precis över detta intervall. I 
Spanien, Italien och Portugal förväntas däremot en inflation på ungefär 4,5 procent medan 
den i Grekland förväntas minska till 9 procent. 
Ytterligare framsteg behöver göras i riktning mot prisstabilitet. Detta innebär framförallt 
att den grupp av medlemsstater som kan anses ha ett tillfredsställande inflationsresultat 
måste utvidgas betydligt. De medlemsstater som för närvarande förväntas ha 
inflationstakter på mellan 2 och 3 procentenheter bör fortsätta med en politik som syftar 
till att förhindra att inflationstrycket kommer tillbaka och försöka nå intervallets nedre 
gräns. Andra länder borde göra betydligt större ansträngningar. 
De växelkursförändringar som inträffade nyligen har stor betydelse för 
inflationskonvergensen. Hos medlemsstater vars valutor apprecierats i nominella termer 
förväntas därför en starkare inflationskonvergens och inflationen beräknas stanna under 3 
procent i år och nästa år. I dessa länder förväntas även löneutvecklingen i stort sett ligga i 
linje med målet om prisstabilitet. Det kommer dock att bli nödvändigt att säkerställa att 
löneutvecklingen inte leder till minskad lönsamhet för investeringarna, särskilt i de 
exportinriktade sektorerna. I medlemsstaterna med valutadeprecieringar däremot är 
prisstabiliteten mer osäker och risken för stegrad inflation överhängande. Dessa länder 
måste vara mycket försiktiga. Inom ramen för en stark ekonomisk tillväxt kommer det att 
vara särskilt viktigt att undvika att ökade importpriser ger upphov till en pris- och 
lönespiral. I annat fall kommer den vunna trovärdigheten av att en stabiliseringspolitik 
håller på att utveckla sig snabbt att gå till spillo. 
Deprecieringen av dollarn kombinerad med osäkra inflations- och finanspolitiska utsikter i 
vissa medlemsstater har givit upphov till en betydande växelkursinstabilitet inom 
gemenskapen. De växelkursförändringar som ägt rum är större än vad som hade kunnat 
motiveras av skillnader i inflationstakt och har lett till försämrad konkurrenskraft i de 
länder som har hållit sig till en sund politik och till större inflationstryck i de länder där 
valutan har deprecierats. Växelkursernas bristande stabilitet är till skada för alla 
medlemsstater. I de stater där valutans värde har ökat försämras de kortsiktiga 
tillväxtperspektiven och i de stater där valutans värde har minskat försämras 
inflationsutsikterna och äventyras den medelfristiga stabiliseringspolitiken. Dessutom 
äventyras den inre marknadens regelrätta funktion. Risken är inte bara att vissa \ 
"""X \ 
investeringsbeslut fattas för att utnyttja de konkurrensfördelar som uppstått genom 
kursförändringen, utan det är även möjligt att särintressen som stödjer en 
devalveringspolitik uppmuntras. 
Därför måste alla medlemsstater driva en politik som främjar stabila växelkurser inom 
gemenskapen. Växelkursstabilitet kommer att bidra dels till att fördelarna med den inre 
marknaden helt kommer till sin rätt och att resursallokeringen inom gemenskapen 
förbättras, dels till att prisstabiliteten kan förbättras. I detta sammanhang kommer 
budgetpolitiken och trovärdigheten av åtaganden om finanspolitisk konsolidering att spela 
en nyckelroll. 
Sunda offentliga finanser 
Trots att den ekonomiska tillväxten konsoliderats är utsikterna för att lösa den 
finanspolitiska obalansen osäkra och finanspolitisk konvergens är fortsatt svår att uppnå. 
Enligt aktuella beräkningar förväntas nettoupplåningen i procent av 
bruttonationalprodukten att minska med c:a 1,5 procentenheter mellan 1994 och 1996, 
varav hälften beror på de automatiska stabilisatorernas inverkan på budgetsaldot. 
Genom att större framsteg uteblir när det gäller budgetkonsolidering upprätthålls i många 
fall en situation där finanspolitiken är hårt begränsad av höga och stigande ränteskulder. 
Detta undergräver dessutom pris- och växelkursstabiliteten, ökar osäkerheten om vilken 
finanspolitik som skall föras och undergräver de olika politiska åtgärdernas trovärdighet, 
bidrar till sinsemellan dåligt överensstämmande politiska åtgärder och undergräver den 
monetära politiken. På medellång sikt kommer en kontinuerlig finanspolitisk obalans att ha 
negativa effekter på den ekonomiska tillväxten och på skapandet av nya arbetstillfällen. En 
sund finanspolitisk situation påverkar utbudssidan positivt eftersom det öppnar vägen för 
skatteminskningar och för en ökning av produktiva offentliga investeringar. De argument 
för en konsolidering av budgeten som grundas på tillväxt och sysselsättning är verkligen 
minst lika viktiga som de argument söm baseras på behovet av att förbättra skuldkvoten 
och uppnå nominell konvergens. Om budgetunderskotten inte kan minskas på ett 
bestående sätt nu i en period av relativ stark tillväxt, när skall de då minskas? 
Den tydliga uppgift som nästan alla medlemsstater står inför, är att se till att dra nytta av 
tillväxtmöjligheterna för att förbättra budgetsaldot genom en minskning av de strukturella 
underskotten. Medlemsstaterna skall ha målsättningen att snarast möjligt minska 
budgetunderskottet till mindre än 3 procent av bruttonationalprodukten, som ett första 
steg mot målet på medellång sikt att reducera underskottet till mellan 0 och 1 procent av 
bruttonationalprodukten, vilket är särskilt viktigt under fas tre enligt vad som angavs i 
1993 års övergripande riktlinjer. Med en sådan politik skulle det vara möjligt att fa ner det 
genomsnittliga budgetunderskottet i gemenskapen till under 3 procent av BNP till 1997. 
Enligt de senaste beräkningarna borde alla medlemsstater, inbegripet de som har ett 
förväntat budgetunderskott för i år som är lägre än 3 procent (Danmark, Tyskland, Irland 
och Luxemburg), utnyttja allt utrymme som ges av en ekonomisk tillväxt utöver 
budgetplanen eller av en räntesänkning, för att påskynda konsolideringen av budgeten. 
Om oroligheterna på valutamarknaden skulle leda till att årets ekonomiska tillväxt avtar, 
bör dock ansträngningarna för att uppnå målen i konvergensprogrammen inte minska. 
Prognosen för 1996 visar att de finanspolitiska målen inte kommer att uppnås på ett 
enhetligt sätt, om man utgår ifrån de anpassningsåtgärder som hittills på ett tydligt sätt har 
angivits av de medlemsstater som har finanspolitiska målsättningar i sina 
konvergensprogram. För att fa ner underskotten till de nivåer som satts som mål i 
konvergensprogrammen behövs anpassningar, om än i olika omfattning, i Belgien, 
Tyskland, Grekland, Spanien, Frankrike och Portugal. I samtliga dessa fall är det 
förväntade bugdetunderskottet större än det som anges i konvergensprogrammet. 
Däremot förväntas Danmark, Irland, Nederländerna och Förenade kungariket uppfylla 
underskottsmålen nästa år. 
I många länder bör en begränsning av ökningen av de offentliga utgifterna ges företräde 
eftersom, bortsett från sysselsättningseffekterna, det utan tvekan finns gränser för högre 
beskattning och sociala avgifter. Men även en rationellare användning av de offentliga 
utgifterna och effektivare skattesystem kan bidra till ekonomisk tillväxt och till skapandet 
av nya arbetstillfällen. Såsom redan föreslagits i 1994 års riktlinjer bör i synnerhet 
skattesystemet anpassas på ett sätt som är förenligt med främjande av sysselsättning 
medan de offentliga utgifterna bör omfördelas från konsumtion till produktivitetshöj ande 
åtgärder. I det senare fallet bör företräde ges till ökade offentliga investeringar och till 
ökade immateriella investeringar i humankapital. Även i detta sammanhang bör 
beskattningen av arbetskraften minskas, särskilt i nedre delen av löne- och 
produktivitetsskalan. Det är dock viktigt att den nödvändiga minskningen av 
budgetunderskottet inte äventyras och därför bör dessa utgifter uppvägas av extra 
inkomster. 
Finanspolitiska problem fortsätter att känneteckna flera medlemsstaters offentliga finanser. 
I Grekland och Italien fortsätter den ihållande finanspolitiska obalansen att ha 
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konsekvenser på andra områden, genom att undergräva pris- och växelkursstabiliteten, ge 
upphov till höga riskpremier på räntesatserna och genom att hindra utvecklingen mot 
konvergens. Det krävs bestämda åtgärder inom ramen för ett flerårigt program för att 
återställa förtroendet för den ekonomiska politiken. När det gäller Sverige som står inför 
liknade problem har ett flerårigt finanspolitiskt anpassningsprogram redan annonserats. 
Det är nödvändigt att hålla fast vid denna kurs. I Belgien kräver den höga skuldsättningen 
att den finanspolitiska delen av den övergripande planen genomförs fullt ut och att 
ytterligare framsteg görs för att minska budgetunderskottet till mindre än 3 procent av 
BNP, så att även skuldkvoten sjunker på ett mera markant sätt. 
I Spanien och Portugal krävs större insatser och mer ambitiösa målsättningar i fråga om 
finanspolitisk konsolidering; mer ambitiösa finanspolitiska målsättningar är även 
nödvändiga i Österrike och Frankrike. I Österrike och Sverige behövs även ytterligare 
insatser för att åstadkomma en nedåtgående trend för skuldkvoten. Slutligen, även om 
Finland ännu inte har utarbetat ett konvergensprogram pekar prognoserna på långtgående 
finanspolitiska målsättningar. Ansträngningarna att uppnå dessa mål bör fortsätta. 
Utvecklingen och utsikterna på det finanspolitiska området i Irland och Luxemburg tyder 
på att dessa länder även fortsättningsvis inte kommer att ha något överdrivet stort 
budgetunderskott. I det förstnämnda landet förväntas skuldkvoten att fortsätta avta i god 
takt, medan tillståndet för de offentliga finanserna i det senare landet fortsätter att vara 
starkt. 
Konkurrenskraft 
I enlighet med förslagen i vitboken om "Tillväxt, konkurrenskraft och sysselsättning" är 
medlemsstaterna i färd med att genomföra reformer i syfte att stärka de krafter som bidrar 
till den inhemskt genererade tillväxten och till att främja dynamiken och konkurrenskraften 
i gemenskapens olika ekonomier. 
För att helt kunna dra nytta av de möjligheter som den inre marknaden erbjuder har 92.4 
procent av gemenskapsdirektiven nu införlivats i nationell lag, med en spridning som 
varierar mellan 86.3 och 98.6 procent. Ytterligare framsteg krävs dock på områden som 
försäkringar, immaterialrätt, offentlig upphandling, nya teknologier och tjänster och den 
fria rörligheten. Vidare har framstegen varit måttliga när det gäller att utvidga den inre 
marknaden till telekommunikations- och energiområdet, samtidigt som den inre 
marknaden på transportområdet förblir ofullständig. Dessutom är ytterligare framsteg 
nödvändiga vad gäller att stärka konkurrensreglerna, minska statliga stöd och minska den 
offentliga sektorns roll. Genom privatiseringar, så långt medlemsstaterna bedömer att det 
är förenligt med deras mål, kan de framsteg som redan gjorts i denna riktning främjas. 
Genomförande av åtgärderna i vitboken om den inre marknaden 
(situation per medlemsstat, i procent, 17.5.1995 
DK NL UK B IRL I GR 
98.6 95.9 95.4 95.0 92.7 92.2 90.9 90.4 90.0 89.5 89.0 86.3 
EG-12: 92.4 
Källa: Europeiska kommissionen 
Olika initiativ har tagits på gemenskapsnivå. Som en följd av rådets rekommendation i 
Essen har en rådgivande grupp i konkurrensfrågor upprättats, som planerar att utarbeta en 
rapport till rådsmötet i Cannes om situationen för gemenskapens konkurrenskraft och 
närbesläktade frågor. Vidare har en grupp för förenkling av lagstiftning och administration 
upprättats. I syfte att främja den allmänna konkurrenskraften har flera frågor tagits upp till 
granskning på gemenskapsnivå, inbegripet finansieringen av små och medelstora företag, 
ökad flexibilitet på arbetsmarknaden och förbättrad yrkesutbildning. 
Det är av väsentlig betydelse för dynamiken i gemenskapens olika ekonomier att öka de 
materiella och immateriella investeringarna. Detta gäller särskilt investeringar i utbildning 
och i gemenskapens infrastruktur som måste utvecklas för att möta nästa århundradets 
utmaningar. De transeuropeiska näten bör genomföras och likaså handlingsplanen för 
informationssamhället. Dessutom är det väsentligt med en bättre samordning av 
medlemsstaternas verksamheter när det gäller att aktivt främja initiativen inom forskning 
och utveckling. Parallellt löpande och samordnade ansträngningar på gemenskapsnivå och 
på medlemsstatsnivå är en väsentlig byggsten för att förverkliga möjligheterna att skapa 
nya arbetstillfällen och tillväxt. 
Sysselsättning och arbetsmarknad 
Om den ekonomiska återhämtningen fortsätter som förväntat, kommer den att absorbera 
den cykliska delen av arbetslösheten senast 1997. För att arbetslösheten skall fortsätta att 
minska i en betydande och tilltagande takt behövs en hög ekonomisk tillväxttakt under 
många år och en ökad tillväxtkapacitet genom övergripande, integrerade och samordnade 
ansträngningar för att åstadkomma strukturförändringar i fråga om 
-8 
utbildningssystem, arbetsrätt, anställningskontrakt, system med avtalsförhandlingar och 
sociala försäkringssystem för att generellt förbättra arbetsmarknadens funktionssätt. 
Inom ramen för vitboken har rådsmötet i Essen, bland de många åtgärder som verkar i den 
riktning som skisserats här, valt att prioritera följande fem: 
• Förbättra arbetstagarnas möjligheter att få arbete genom att främja investeringar i 
yrkesutbildning. 
• Öka tillväxtens arbetsintensitet. 
• Minska den del av arbetskraftskostnaden som inte utgör lön. 
• Förbättra arbetsmarknadspolitikens effektivitet. 
• Förbättra åtgärderna för att hjälpa de grupper som drabbats särskilt hårt av 
arbetslösheten. 
Medlemsstaterna har anmodats att genomföra de åtgärder som är anpassade till deras egen 
situation och att utarbeta fleråriga program som anger deras politiska intentioner. Ett antal 
åtgärder har redan vidtagits, men större och mer beslutsamma insatser behövs. 
En aktiv och mer effektiv arbetsmarknadspolitik bidrar till att uppnå målet att öka 
sysselsättningen genom huvudsakligen följande tre kanaler: 
i) Den förbättrar arbetstagarnas möjligheter till arbete genom att främja investeringar i 
yrkesutbildning, särskilt i små och medelstora företag, och på så sätt öka 
arbetskraftens kvalitet, vilket gagnar konkurrenskraften, den potentiella produktionen 
och arbetskraftens flexibilitet och möjligheter. 
ii) den öka tillväxtens arbetsintensitet utan att påverka själva tillväxttakten negativt 
genom att 
- parterna på arbetsmarknaden på lämplig nivå undersöker om sysselsättningen kan 
främjas utan att äventyra konkurrenskraften, genom att produktivitetsvinsterna 
investeras i innovativa former av arbetsorganisation, exempelvis förkortad 
arbetsdag och nya sätt att förlägga arbetstiden, och nya kombinationer av arbete 
och fritid 
öka anställningsincitamenten genom att minska den del av arbetskraftskostnaden 
som inte utgör lön, särskilt på den nedre delen av löne- och produktivitetsskalan, 
utan att andra delar av arbetsmarknaden påverkas negativt. Från en 
makroekonomisk utgångspunkt måste detta åstadkommas utan att minskningen 
av budgetunderskotten eller företagens konkurrensförmåga äventyras. Därför 
krävs reformer, som vid behov även omfattar alternativa finansieringskällor för 
de sociala skyddssystemen. 
uppmuntra utvecklingen av nya arbetstillfällen och verksamheter, t.ex. sådana 
som är relaterade till tjänstesamhället och till en miljömässigt hållbar utveckling, 
iii) Den främjar möjligheten att anställa arbetskraft när nya arbetstillfällen uppstår genom 
att 
öka arbetsmarknadspolitikens effektivitet genom ökad yrkesmässig och 
geografisk rörlighet (särskilt för de arbetstagare som kan anställas omedelbart), 
förbättra åtgärderna för att hjälpa de grupper som drabbats särskilt hårt av 
arbetslösheten, genom särskilda utbildningsprogram som fokuseras på 
målgrupper som drabbats av utslagning. 
En arbetsmarknadspolitik som utnyttjar dessa tre kanaler utgör inte endast ett oumbärligt 
komplement till den makroekonomiska politiken och strukturpolitiken på 
konkurrensområdet, utan bidrar även till att bibehålla och förstärka sammanhållningen och 
det sociala samförståndet inom unionen under den långa och svåra processen att råda bot 
på arbetslösheten. 
För att höja effektiviteten av de insatser som görs för närvarande och för att generellt öka 
det inbördes sammanhanget mellan de olika politiska åtgärderna, överlämnade 
kommissionen den 8 mars 1995 ett meddelande till rådet i vilket den föreslår, inom ramen 
för artikel 103 i fördraget, att ett förfarande för övervakning av sysselsättningstendenserna 
och de sysselsättningspolitiska åtgärderna införs. 
Det är viktigt att medlemsstaterna snabbt antar sina fleråriga program vilka kommer att 
vara ett riktmärke för den fortlöpande övervakningen av deras sysselsättningsskapande 
åtgärder. Vart och ett av dessa program bör vara förenligt med den makroekonomiska 
ram som definieras i de övergripande riktlinjerna för den ekonomiska politiken. 
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II. Explanatory document 
This explanatory document reviews the economic situation and outlook, the progress 
made in implementing the previous Broad Guidelines and the current stance of 
economic policy. In accordance with what was announced in the Communication to 
the Council on the Follow-up to the Essen European Council on Employment1, 
employment trends and policies are given greater prominence. 
On the basis of the analysis outlined in this explanatory document, the Commission is 
recommending a new set of guidelines for the economic policies of the Member States 
and of the Community which are firmly oriented towards achieving economic 
convergence and fostering job creation. These guidelines confirm the thrust of those 
adopted in December 1993 and July 1994, but take into account the fact that the 
economies of the Community are now at a much more advanced stage of the recovery 
and that a number of risks are appearing on the way to transforming the current 
recovery into strong medium-term growth. 
1. Introduction 
The economic outlook for the Community continues to be favourable. The recovery, 
which had just become visible a year ago when the 1994 Broad Guidelines were 
adopted, has gathered strength and its pattern - exports and investment continue to be 
the most dynamic components - remains conducive to sustained medium-term growth. 
Notwithstanding the negative effects of the recent foreign exchange turmoil, growth is 
expected to remain satisfactory also in 1996. The recent episode of exchange rate 
instability has certainly affected business confidence negatively, but the fundamental 
factors determining growth remain favourable. 
Progress has taken place in achieving the degree of nominal convergence necessary for 
the transition to EMU. But more needs to be done and, in certain cases, progress has 
been disappointing relative to what could have been achieved in the current favourable 
economic environment. The recent instability of foreign exchange markets, even if its 
origin lays to a great extent outside the Community, highlights the lack of convergence 
which still characterises the economic performance of several Member States, and 
especially the lack of credibility of their budgetary consolidation plans. 
"Follow-up to the Essen European Council on Employment" Com (95) 74 final of 8 March 1995 
11 
Given that employment always responds with a lag to a recovery in economic activity, 
the improvement in the economic situation is not yet contemporaneously reflected in a 
similar upturn in labour market conditions, even though the reduction of 
unemployment in this cycle is expected to be much more pronounced than that seen in 
the early 1980s. Employment, which declined again in 1994, is now projected to 
increase this year and in 1996 by about one per cent a year, with the rate of 
unemployment also starting to decline. 
Under these circumstances, economic policy must be resolutely oriented towards the 
twin objectives achieving economic convergence and fostering job creation. This 
means achieving strong, non-inflationary and more employment-creating rates of 
growth. 
2. The economic situation and outlook 
2.1 Growth prospects 
Economic growth in the Community is projected to average 3.1 per cent in 1995 and 
2.9 "per cent in 1996, up from an estimated 2.7 per cent last year. Thus, the recovery 
which commenced towards the second half of 1993, is now being transformed into 
robust economic growth so that, by 1996, real output in the Community will be almost 
10 per cent above the 1991 level. 
The economic expansion has been, and is expected to continue to be, sustained by 
strong exports, investment spending and, to a lesser extent, private consumption 
growth. Buoyant world trade conditions are expected to sustain Community exports 
which should increase, in real terms, by 7.5 and 6.5 per cent, respectively, during this 
year and next. Investment spending, which is estimated to have grown by 2.4 per cent 
in 1994, is projected to increase by 6.3 per cent this year and by just below 6 per cent 
in 1996. Finally, private consumption, is projected to expand by 2.1 per cent this year 
and by 2.5 per cent in 1996. This pattern of growth - with investment growing at a 
brisk pace - corresponds closely to what is necessary to create the conditions for a 
long period of strong growth. 
The recent weakening of the dollar in the foreign exchange markets and the substantial 
depreciations experienced by some European currencies are having a twofold effect on 
12 
Community growth prospects. On the one 
hand, overall growth is slowed down as 
Community exports become, on average, more 
expensive on world markets and as business 
confidence is negatively affected by the 
uncertainty induced by exchange rate instability. 
On the other hand, the exchange rate 
movements within the Community may result in 
short-term differential effects on the growth 
prospects of countries whose currencies have 
depreciated compared with those which 
appreciated. 
The fundamental factors which shape economic 
growth in the Community, however, remain 
favourable. World trade is expected to 
continue expanding strongly while labour 
productivity and investment profitability trends within the Community are 
encouraging. As a result, most Member States are expected to show satisfactory 
rates" of economic growth (see Table 1), with Ireland projected to post remarkably fast 
rates of output and employment growth throughout the period. Table 1 
Economic growth in the Community 
(percentage change in real GDP) 
B 
DK 
D 
GR 
E 
F 
IRL 
I 
L 
NL 
A 
P 
FIN 
S 
UK 
EC 1993 
-1.7 
1.5 
-1.1 
-0.5 
-1.1 
-1.5 
4.0 
-0.7 
2.1 
0.3 
-0.1 
-1.2 
-1.6 
-2.6 
2.0 
-0.5 1994 
2.3 
4.4 
2.9 
1.2 
2.0 
2.7 
6.3 
2.2 
3.0 
2.5 
2.7 
1.1 
3.9 
2.2 
3.8 
2.7 1995 
2.7 
3.3 
3.0 
1.6 
3.1 
3.1 
6.9 
3.3 
3.3 
3.2 
2.7 
3.0 
5.3 
2.8 
3.1 
3.1 1996 
2.6 
2.9 
2.6 
1.8 
3.4 
2.9 
5.5 
3.4 
2.9 
2.8 
2.5 
3.2 
4.2 
3.0 
2.8 
.2.9 
Source: Commission Spring 1995 economic forecasts 
2.2 Employment trends 
Following three years of net job losses, employment in the Community is projected to 
expand again in 1995 and 1996. Employment in the Community declined by a 
cumulative 3.9 percentage points over the period 1992-1994: 5.8 million jobs were 
lost. 1995-96 should see an increase in employment of about one per cent a year 
which implies the net creation, over the two years, of about 3 million jobs. Given that 
in 1995-96 the active population will increase by about 1.4 million persons, the 
expected job creation will allow a net reduction of unemployment by approximately 
1.6 million. 
This year and next employment is expected to rise in all the Member States, with 
particularly strong rates of increase in Denmark, Spain, the Netherlands, Sweden, the 
United Kingdom, and especially so in Luxembourg, Finland and Ireland (see table 2). 
13-
In recent years, labour productivity growth evolved in a way similar to that of all 
previous cyclical episodes: it decelerated substantially during the recession (see 
table 3) and accelerated at the beginning of the recovery (3.2 per cent in 1994). For 
1995 and 1996, however, the forecasts suggest a return to the trend of the last twenty 
years (about 2 per cent). In the present forecast the Community economy is therefore 
expected to show an employment content of growth which is not inferior, but also not 
greater, than that of the last twenty years. 
Table 2 
Employment and Unemployment 
(percentage change and per cent of the labour force) 
B 
DK 
D 
GR 
E 
F 
IRL 
1 
L 
NL 
A, 
P 
FIN 
S 
UK 
EC Employment growth 
1994 
-0.7 
-0.1 
-0.9 
1.3 
-0.9 
0.1 
2.6 
-1.6 
2.6 
-0.0 
0.2 
-0.1 
-0.8 
-0.9 
0.3 
-0.5 1995 
0.7 
2.3 
0.7 
1.0 
1.5 
1.1 
2.7 
0.3 
2.8 
1.3 
0.5 
0.4 
3.0 
2.0 
1.2 
1.0 1996 
1.0 
1.1 
0.9 
1.0 
2.0 
1.0 
2.6 
0.8 
2.7 
1.9 
0.4 
0.7 
2.5 
1.8 
1.1 
1.1 Unemployment rates 
1994 
10.0 
10.2 
8.4 
9.6 
24.1 
12.5 
15.1 
11.4 
3.5 
7.7 
4.0 
6.9 
18.5 
7.8 
9.4 
11.2 1995 
9.6 
8.6 
7.8 
9.6 
23.7 
12.1 
14.1 
11.4 
3.6 
7.6 
3.9 
6.7 
16.3 
7.2 
8.3 
10.7 1996 
9.1 
8.0 
7.3 
9.5 
22.8 
11.5 
13.1 
10.9 
3.4 
7.2 
3.8 
6.3 
14.6 
6.5 
7.8 
10.1 
Source. Commission Spring 1995 economic forecasts 
N.B. At the beginning of 1995 Eurostat has significantly revised its unemployment figures 
Employment in the manufacturing sector, where productivity increases are particularly 
strong, declined by about 2.5 per cent last year, but is now expected to recover to a 
projected growth of 0.5 per cent in 1995 and 1.1 per cent in 1996. The expansion in 
employment in this sector as well suggests that the recovery has given way to a 
sustained growth process. 
The projected increases in employment will produce a decline in the unemployment 
rate from a peak of 11.2 per cent of the labour force in 1994 to 10.1 per cent in 1996. 
Large declines in unemployment in the period 1994-1996 are projected to take place in 
Finland (3.9 percentage points), Denmark (2.2 points) and Ireland (2 points). 
- 14 
High unemployment, however, is projected to continue to mark the labour market 
experience of Spain, Ireland, Finland; in Italy and France unemployment is expected 
to remain between 10.5 and 11.5 per cent in 1996; in Belgium and Greece 
unemployment is projected to remain between 9 an 9 14 per cent; finally, with regard 
to the remaining eight Member States, the rate of unemployment is expected to range 
from a low of 3 V* per cent in the case of Luxembourg to a high of 8 per cent in the 
case of Denmark. 
Table 3 
Labour Productivity Growth 
(annual percentage changes) 
B 
DK 
D* 
GR 
E 
F 
IRL 
1 
L 
NL 
A 
- p 
FIN 
S 
UK 
EC* 1961-73 
4.3 
3.2 
4.0 
8.1 
6.5 
4.7 
4.3 
5.5 
3.0 
3.9 
5.0 
6.6 
4.5 
3.5 
2.9 
4.4 1974-90 
2.0 
1.4 
1.9 
1.4 
2.7 
2.2 
3.8 
2.0 
1.3 
1.7 
1.5 
3.4 
2.6 
1.1 
1.6 
2.0 '91 
2.1 
2.9 
2.5 
5.6 
1.8 
0.7 
2.9 
0.4 
-1.0 
0.9 
0.9 
1.3 
-2.0 
0.4 
1.1 
1.5 •92 
2.3 
1.2 
3.9 
-0.6 
1.9 
2.2 
4.5 
1.8 
0.0 
0.4 
0.0 
1.7 
3.7 
3.2 
1.6 
2.3 '93 
-0.3 
2.2 
0.7 
-1.5 
3.3 
-0.3 
3.3 
2.2 
0.0 
0.5 
0.4 
0.8 
5.0 
3.2 
3.7 
1.5 '94 
3.1 
4.5 
3.8 
-0.1 
2.9 
2.6 
3.6 
3.8 
0.4 
2.5 
2.5 
1.3 
4.7 
3.1 
3.4 
3.2 •95 
1.9 
1.0 
2.3 
0.6 
1.6 
1.9 
4.1 
3.0 
0.4 
1.9 
2.2 
2.5 
2.3 
0.9 
1.8 
2.1 •96 
1.6 
1.8 
1.8 
0.7 
1.4 
1.8 
2.9 
2.6 
0.1 
0.9 
2.1 
2.5 
1.6 
1.2 
1.7 
1.8 1991-96 
1.8 
2.2 
1.7 
0.8 
2.1 
1.5 
3.6 
2.3 
0 
1.2 
1.4 
2.8 
2.5 
2.0 
2.2 
2.1 
Source Commission Spring 1995 economic forecasts ' For the averages until 1991 Germany = West Germany 
While employment trends and the pace of the reduction of unemployment correspond 
closely to expectations, unemployment continues to be a major policy concern. 
Current and projected trends suggest the need to ensure that the rate of economic 
growth remains strong over many more years so as to make possible the recovery of 
the ground lost during the recession and to set in train reductions in unemployment 
below the level achieved at the peak of the previous cycle. 
2.3 The Outlook for Inflation and Budgetary Convergence 
Of all areas of convergence in the Community, most progress has taken place with 
regard to inflation. Measured by the private consumption deflator, the Community 
average rate of inflation declined to 3.2 per cent in 1994, from a peak of 5.6 per cent 
15 
in 1991, and is expected to remain at its 1994 level during this year and in 1996. The 
guidelines goal of the Community achieving a rate of inflation of between 2 and 3 per 
cent by 1996, as a first step towards price stability, will therefore not be fully met. 
In 1994, ten Member States had inflation at or below 3 per cent while the remaining 
had inflation in excess of 3 per cent. Changes in the country composition of these 
groups are projected to take place in 1995 and in 1996, with Ireland's and Austria's 
inflation falling below 3 per cent this year and easing to 2.7 per cent in 1996 in Ireland 
while stabilising at somewhat below 3 per cent in Austria; Sweden's and Finland's 
inflation accelerating to around 3.3 per cent next year; and the UK's staying flat at 3 
per cent this year and next. 
Price convergence appears secure in the group 
of Member States which are seeing effective 
exchange rate appreciations. Inflation in eight 
Member States (Belgium, Denmark, Germany, 
France, Ireland, Luxembourg, the Netherlands, 
Austria) is expected to be below 3 per cent this 
year and next. 
In Portugal and Finland, which have also seen 
recently effective exchange appreciations, 
inflation prospects are less encouraging. In 
Portugal, after a significant decline from the 
level of 1993 and a smaller one from last year, 
inflation is expected to stabilise at 4.5 per cent 
this year and next. In Finland, on the other 
hand, inflation is forecast to accelerate 
markedly next year. Table 4 
Inflation 
(percentage change, 
private consumption deflator) 
B 
DK 
D 
GR 
E 
F 
IRL 
1 
L 
NL 
A 
P 
FIN 
S 
UK 
EC 1993 
2.6 
1.0 
3.8 
13.6 
5.6 
2.2 
1.6 
5.1 
3.6 
2.1 
3.5 
7.9 
3.9 
5.8 
3.4 
4.0 1994 
2.4 
1.7 
2.7 
10.9 
5.1 
1.8 
3.0 
4.7 
2.2 
2.2 
3.3 
5.1 
1.6 
3.0 
2.5 
3.2 1995 
1.9 
2.3 
2.3 
9.6 
4.9 
1.9 
2.9 
5.2 
2.3 
1.8 
2.8 
4.5 
1.7 
3.2 
3.0 
3.2 1996 
2.4 
2.7 
2.5 
8.9 
4.5 
2.1 
2.7 
4.5 
2.5 
2.2 
2.9 
4.5 
3.3 
3.2 
3.0 
3.2 
Source: Commission services Spring 1995 forecasts 
The inflation outlook remains uncertain in the Member States which have experienced 
currency depreciations in recent months (Italy, Greece, Sweden, Spain and the UK). 
While, it may be argued, the inflationary consequences of the depreciation would not 
emerge until actual output rises above potential, uncertainty about the exact level of 
the output gap, and the possibility that potential output may have declined during the 
recession, would suggest that the risk for an acceleration of inflation dominates the 
outlook. 
- 16-
Greece, Spain, Italy and Portugal are recording and are expected to record, a less 
satisfying, albeit to different degrees, price convergence in the Community, and 
Sweden's inflation is not expected to post any deceleration over the forecast period. 
Inflation in the UK is projected to remain stable at 3 per cent in 1995 and 1996. 
However, there is considerable uncertainty about the inflation outlook in view of the 
fact that, in addition to recent exchange rate developments, the UK will have had four 
years of strong economic growth by 1996 and the level of excess capacity will have 
narrowed substantially. In the UK, but also in Finland and Sweden where monetary 
policy pursues an inflation target, vigilance is an essential ingredient of the policy 
stance. 
Table 5 
Nominal effective exchange rate changes 
(relative to 19 industrial partners) 
Annual percentage changes 
B 
DK 
D 
GR 
E 
F 
1RL 
1 
NL 
A 
P 
FIN 
S 
UK 
EC 1992 
2.3 
2.8 
3.3 
-7.7 
-1.8 
3.6 
2.8 
-2.7 
2.4 
2.6 
3.6 
-12.7 
1.3 
-3.6 
2.2 1993 
0.8 
2.1 
2.7 
-9.6 
-13.1 
1.9 
-5.9 
-16.9 
3.0 
2.4 
-7.6 
-14.8 
-19.3 
-9.0 
-13.1 1994 
1.6 
0.1 
0.1 
-7.1 
-6.7 
0.6 
0.3 
-4.6 
0.4 
0.0 
-4.7 
7.5 
-1.2 
0.2 
-2.2 1995* 
5.3 
5.3 
6.8 
-3.3 
-2.1 
4.0 
-0.4 
-14.3 
5.2 
4.9 
2.8 
9.3 
-4:7 
-4.0 
1.4 Cumulative changes since 1991 
B 
DK 
D 
GR 
E 
F 
IRL 
I 
NL 
A 
P 
FIN 
S 
UK 
EC 1992 
2.3 
2.8 
3.3 
-7.7 
-1.8 
3.6 
2.8 
-2,7 
2.4 
2.6 
3.6 
-12.7 
1.3 
-3.6 
2.2 1993 
3.1 
4.9 
6.1 
-16.6 
-14.7 
5.5 
-3.3 
-19.2 
5.5 
5.1 
-4.3 
-25.7 
-18.2 
-12.3 
-11.2 1994 
4.8 
5.0 
6.3 
-22.5 
-20.4 
6.1 
-3 
-22.9 
6.0 
5.0 
-8.7 
-20.1 
-19.1 
-12.1 
-13.2 1995* 
10.3 
10.5 
1.3.4 
-25.0 
-22.1 
10.4 
-3.5 
-33.9 
11.4 
10.1 
-6.2 
-12.6 
-22.8 
-15.6 
-12.0 
Source: Gommission Services * on the assumption that exchange rates wt reman constant at their Apnl 1995 level 
A notable feature of the inflation performance since 1993 is that, despite the severity 
of the recession, the average rate of inflation in the Community has remained at over 3 
per cent. Certainly a large number of countries are currently experiencing a 
satisfactory price performance, but in about a third of the Member States, inflation still 
gives cause for concern. In addition, no further progress in lowering inflation is 
projected for this year and next. 
17 
The apparent stickiness of inflation could reflect the influence of several, reinforcing, 
factors. On the one hand, the amount of spare capacity created during the recession 
may be smaller than currently estimated. This could be the result of measurement 
errors or of an acceleration in the scrapping of obsolete capacities. On the other 
hand, the credibility of announced monetary and, above all, fiscal policies may still be 
too low and unable to affect significantly expectations about future inflation. In 
addition, in some Member States currency depreciations have contributed to sustaining 
inflation. Finally, it is possible that non-competitive conditions continue to prevail in 
several Community countries despite the efforts to implement the internal market. 
An implication of these considerations is that further reductions in inflation will require 
measures which foster the credibility of policies, which improve the adaptability of 
workers in a changing economic environment, and which also foster competition. In 
particular, it is important to strengthen the credibility of the low inflation targets, so 
that they can be incorporated into pay trends, and of the budgetary consolidation 
programmes. 
Budgetary convergence in the Community continues to be elusive. Table 6 shows 
that, for the Community as a whole, the net borrowing of the general government, 
which peaked at 6.3 per cent of GDP in the recession year 1993, is currently estimated 
to decline gradually to 4.5 per cent of GDP in 1995 and to 3.9 per cent by 1996. 
Between 1994 and 1996, the largest reduction in the deficit is projected to take place 
in Finland and Sweden (4.6 and 4.5 percentage points in terms of GDP, respectively), 
followed by the UK (4 points), Denmark (2.8 points), and Greece (2.3 points). In 
addition to these five countries, five more, Belgium, Spain, France, Italy and Portugal, 
are expected to register deficit reductions ranging between one and two percentage 
points of GDP, with Spain and France envisaged to make the greatest degree of 
progress amongst this group. No significant change is expected in relation to the five 
remaining Member States which, with the Netherlands and Austria, includes the three 
countries which were below the reference value of 3 per cent of GDP in 1994, namely 
Germany, Ireland and Luxembourg. On the basis of the present forecasts seven 
Member States will have a general government deficit at or below the reference value 
of 3 per cent of GDP by 1996. 
The forecasts are based on the assumption of unchanged policies; however, not all 
Member States have announced their concrete budgetary intentions for 1996. An 
implication of this assumption for the projected fiscal adjustment is provided by the 
-18-
decomposition of the change in net borrowing into a cyclical and a discretionary part. 
Table 7 shows that over a three-year period of strong economic growth (1994-96) 
only small reductions in the structural deficits are expected to take place. The 1.6 
point in terms of GDP cumulative decline in Community net borrowing between 1994 
and 1996 reflects only 0.8 of one per cent of GDP discretionary deficit reduction. 
Table 6 
General government deficit 
(per cent of GDP) 
B 
DK 
D 
GR 
E 
F 
IRL 
1 
L 
NL 
A 
P 
FIN 
-" s 
UK 
EC 1993 
6.6 
4.5 
3.3 
13.2 
7.5 
6.1 
2.4 
9.6 
-2.1 
3.3 
4.1 
7.0 
7.8 
13.4 
7.8 
6.3 1994 
5.3 
4.0 
2.5 
12.5 
6.6 
6.0 
2.3 
9.0 
-2.3 
3.1 
4.0 
5.8 
5.6 
10.4 
6.9 
55 1995 
4.2 
1.9 
2.1 
11.3 
6.0 
4.9 
2.8 
7.9 
-1.4 
3.2 
4.6 
5.6 
5.0 
9.1 
4.8 
4.5 1996 
3.9 
1.2 
2.4 
10.2 
4.8 
3.9 
2.6 
-8.1 
-1.5 
2.5 
3.9 
4.7 
1.1 
5.8 
2.9 
3.9 
Source; Commission Spring 1995 economic forecasts; (-) indicates a surplus 
The persistence of fiscal disequilibrium has contributed significantly to the growth in 
the general government indebtedness in the Community. At the beginning of the 
present decade the ratio of general government debt to GDP in the Community was 
55.8 per cent; as can be seen in table 8, it grew to 66.2 per cent in 1993, and it is 
currently expected to grow to 70.4 per cent of GDP by 1996. In 1996, four Member 
States (Germany, France, Luxembourg, and the UK) are projected to have a debt ratio 
below the 60 per cent of GDP mark. Of the remaining Member States, the debt ratio 
is projected to increase in six (Greece, Spain, Austria, Portugal, Finland, Sweden), 
while in another five (Belgium, Denmark, Ireland, Italy, the Netherlands) it is 
projected to decline. Despite the good growth prospects, these trends suggest that 
substantially more ambitious fiscal plans than those currently contemplated are 
necessary in order, in several cases, to stabilise the debt ratio and to place it 
unambiguously on a downward path. 
- 19 
From a medium-term perspective, covering the period 1993-1996, in four Member 
States (Belgium, Denmark, Ireland, the Netherlands) the debt ratio is projected to 
decline, with the largest decline projected to take place in Ireland (16.2 percentage 
points in terms of GDP), followed by Belgium and Denmark (4.9 points) and by the 
Netherlands (4.3 points). 
Table 7 
Changes in the actual and cyclically adjusted general government deficit 
(per cent of GDP) 
B 
DK 
D . 
GR 
E 
F 
IRL 
1 
L* 
NL 
A 
P 
FIN 
S 
UK 
EC Changes in the actual deficit 
1993 
-0.1 
1.6 
0.4 
0.9 
3.3 
2.2 
0.0 
0.1 
-1.3 
-0.6 
2.1 
3.7 
1.9 
5.6 
1.7 
1.2 1994 
-1.3 
-0.5 
-0.8 
-0.7 
-0.9 
-0.1 
-0.1 
-0.6 
-0.2 
-0.2 
-0.1 
-1.2 
-2.2 
-3.0 
-0.9 
-0.8 1995 
-1.1 
-2.1 
-0.4 
-1.2 
-0.6 
-1.1 
0.5 
-1.1 
0.9 
0.1 
0.6 
-0.2 
-0.6 
-1.3 
-2.1 
-1.0 1996 
-0.3 
-0.7 
0.3 
-1.1 
-1.2 
-1.0 
-0.2 
0.2 
-0.1 
-0.7 
-0.7 
-0.9 
-3.9 
-3.3 
-1.9 
-0.6 Changes in the cyclically-adjusted deficit 
1993 
-2.4 
1.2 
-1.4 
0.2 
0.9 
0.5 
-0.8 
-1.2 
-2.0 
-2.2 
0.9 
2.1 
0.1 
2.4 
1.4 
-0.4 1994 
-1.0 
0.8 
-0.7 
-0.8 
-1.3 
0.1 
0.5 
-0.4 
-0.4 
-0.2 
0.1 
-1.7 
-0.6 
-2.0 
-0.1 
-0.5 1995 
-0.8 
-1.3 
-0.3 
-1.1 
-0.2 
-0.7 
1.2 
-0.6 
11 
0.7 
0.7 
0.1 
1.9 
0.0 
-1.6 
-0.5 1996 
0.1 
-0.4 
0.3 
-0.9 
-0.7 
-0.5 
-0.2 
0.8 
-0.3 
-0.4 
-0.6 
-0.4 
-2.4 
-1.9 
-1.6 
-0.3 B 
DK 
D 
GR 
E 
F 
IRL 
1 
L 
NL 
A 
P 
FIN 
S 
UK 
EC 
Source: Commission Spring 1995 economic forecasts; (-) indicates a reduction, (+) indicates an increase in the respective deficits 
* Luxembourg has a surplus, thus a (-) indicates an increase, (+) a reduction in its surplus. 
In France the debt ratio is projected to increase to 52.8 per cent of GDP by 1996, 
while in the UK it is projected to stabilise at 51.5 per cent of GDP this year and next. 
In Germany, the sharp rise in the debt ratio this year is a reflection of the take-over by 
the general government of off-budget liabilities related to unification. 
In Greece and Italy a rise in the debt ratio by 1 and 5 points, respectively, is projected 
between the period 1993-1996. In Italy the debt ratio is expected to have peaked in 
1994 and relative to this mark a modest adjustment is projected for this year and next. 
In Greece, where the debt ratio is also already very high, debt convergence will be 
worsening this year and next. 
-20 
Finally, worsening convergence on the basis of the debt criterion is also expected to 
take place in Spain and Portugal, where the debt ratio is projected to rise by 5.3 and by 
4.1 points, respectively, between 1993 and 1996 and to reach 65.2 and 70.7 per cent 
of GDP, respectively, in 1996. 
Table 8 
General government gross debt 
(per cent of GDP) 
B 
DK1) 
D 
GR 
E 
F 
IRL 
1 
L 
NL 
A 
P 
FIN 
S 
UK 
EC 1993 
137.2 
80.3 
48.2 
115.2 
59.9 
45.8 
97.0 
119.4 
6.9 
81.4 
62.8 
66.6 
57.1 
76.2 
48.5 
66.2 1994 
136.1 
75.6 
50.1 
114.1 
62.3 
48.5 
89.8 
125.4 
7.2 
78.1 
64.5 
69.2 
60.1 
79.1 
50.1 
68.1 1995 
134.3 
76.1 
58.2 
115.3 
64.6 
51.2 
84.6 
124.9 
7.6 
78.1 
66.2 
70.5 
64.4 
84.6 
51.5 
70.3 1996 
132.3 
75.4 
58.1 
116.2 
65.2 
52.8 
80.8 
124.4 
7. a 
77.1 
67r4 
70.7 
64.6 
85.7 
51.5 
70.4 
Source: Commission Spring 1995 economic forecasts 
1) Government deposits with the central bank, government holdings of non-governmental bonds and public enterprises related debt amounted 
to 23.4% of GDP in 1994 
2) The sharp increase in the German debt ratio in 1995 is mainly caused by the take-over by the government of off-budget unification-related 
liabilities, the most important of which is the debt of the "Treuhandanstalt" 
Worrying trends have also emerged in the debt ratio in the three new Member States. 
While the large increases occurring over the period 1993-1996 reflect to a 
considerable extent the impact of the recession, it is also clear that adjustment plans of 
greater ambition are necessary in order to halt the rise, and to ultimately reverse 
direction, in the path of the debt ratio. In May 1995 Austria presented a convergence 
programme and Sweden is expected to do so in June. 
It is possible that the persistence of fiscal imbalances in the Community countries, and 
the failure to decisively advance fiscal consolidation in periods of strong economic 
growth, reflect also the importance of budget institutions and procedures in the 
determination of fiscal deficits as well as the nature of political discourse. In several 
Community countries the rules according to which budgetary policy is approved and 
21 
amendments to budget plans are admissible, play a key role in fiscal outcomes. It is 
also possible that the form the commitment to fiscal consolidation takes may not be 
conducive to fiscal discipline; for example, it may be appropriate to combine improved 
budget procedures with numerical fiscal targets in order to enhance the probability that 
fiscal programmes are actually implemented as planned. 
The importance of these considerations has now become more pronounced, both 
because it is necessary to explore all avenues to strengthen fiscal discipline in the 
Member States and in order to increase the probability that fiscal convergence criteria 
are met by the largest possible group of countries prior to the move to stage III of 
EMU. 
The forecast for 1996 indicates that, on the basis of the adjustment measures which 
have been clearly specified so far among those Member States which have set fiscal 
targets in their convergence programmes, the fiscal objectives will not be uniformly 
respected. Adjustment to achieve the deficit target of the convergence programme is 
required, albeit of different magnitude, in the cases of Belgium, Germany, Greece, 
Spain, France, and Portugal; in all these cases, the projected deficit is larger than that 
set in the convergence programme. On the other hand, Denmark, Ireland, the 
Netherlands, and the UK are expected to meet the deficit objectives by next year. Of 
the new Member States, Austria has recently submitted a convergence programme and 
Sweden is expected to do so in June. In both cases more ambitious targets would be 
required to ensure that fiscal convergence is secure. Finally, in Finland where a 
substantial fiscal consolidation effort is under way, policies should ensure that the 
projected reduction of the deficit in 1996 is in fact realised. 
3. The policy objectives and risks 
The Broad Guidelines of December 1993 and July 1994 have laid out the broad thrust 
of the policies needed to achieve economic convergence and to foster job creation. 
The 1995 Broad Guidelines should confirm these objectives. In addition, the 
recommended policies should take account of the risks and concerns characterising the 
current economic outlook. 
The Community economy is still broadly expanding at the pace forecast a few months 
ago, even if growth prospects have become somewhat less favourable. The 
improvement in the consumer and business confidence indicators stalled at the 
beginning of this year, even before the recent period of exchange rate instability. In 
-22 
addition, a new period of weakness of the US dollar vis-à-vis the European currencies 
would create an atmosphere of greater uncertainty that might jeopardise the projected 
positive growth. On the other hand, it should be stressed that, as already noted, the 
main factors affecting growth prospects - notably world trade and investment 
profitability - remain good and that a rate of growth stronger than the one now 
projected cannot be ruled out. Economic policy must therefore act to prevent 
developments that might jeopardise the continuation of the growth process. 
The first risk to be considered is that of a renewed resurgence of inflation. As regards 
the consequences of the recent currency movements for inflation two different groups 
of countries may be identified: on the one hand the countries whose currencies 
appreciated in effective terms and who are therefore likely to "import" price stability 
and on the other hand the ones whose currencies devalued (especially Italy) and whose 
inflation, all other things held equal, will tend to increase. Overall, this risks making 
inflation performances more divergent than prior to the recent exchange market 
episodes. 
Inflationary pressures may appear due to the fact that the economy's actual rate of 
growth may approach to or exceed the potential rate of growth, especially in 1996, 
whîch would cause capacity constraints leading to inflationary tensions. This risk will 
be less apparent if business investment in the Community increases significantly over 
the next few years. Furthermore, there may be a danger that wage settlements will be 
higher than currently forecast and put upward pressure on prices and/or lead to 
reduced investment profitability. This danger could also arise from a desire to 
compensate, too rapidly and at the expense of growth and employment, for the low 
increases or, in some cases, actual declines in real wages during the 1993-94 period of 
sluggish economic growth and of rising unemployment. Some countries are already 
expected to record inappropriately high wage increases in 1995-96. 
The second, and more worrying, concern is that budgetary positions in several 
Member States remain unsatisfactory. Increased consolidation efforts are therefore 
necessary and the elimination of structural budgetary deficits must be tackled now, 
during the recovery, when the Member States can also take advantage of the 
functioning of automatic stabilisers. In addition, with the still high levels of public 
debt, several Member States continue to be very vulnerable to interest rate shocks that 
are possibly associated with uncertainties about fiscal, exchange rate and price 
-23-
developments and could in those countries effectively eliminate the budgetary gains 
likely to occur during the recovery. 
Finally, as already put forward in the Commission's 1995 Annual Economic Report, 
the favourable economic conditions created by the recovery may give rise to 
"adjustment neglect". This could take the form of a less determined commitment by 
the public authorities to tackle the structural causes of the high budget deficits as the 
recovery makes a positive cyclical contribution to tax receipts and to the budget 
balance. Furthermore, the efforts aimed at the removal of labour market rigidities 
may seem less urgent in the short term when employment is starting to rise again and 
unemployment is falling. Such a relaxation in consolidation and reform efforts would 
seriously put at risk the successful transformation of the recovery into a sustained and 
job-creating growth process, would contribute to an unbalanced policy mix and would 
increase the risk of a new recession. 
Strengthening convergence and sustaining economic growth will require that the 
opportunities emerging in the present recovery are wisely taken advantage of. It is 
clear that an important contribution to inflation convergence will be made by wage 
developments. 
If nominal wage increases begin to accelerate with the consolidation of economic 
growth, especially before unemployment declines substantially, also giving rise to an 
acceleration of inflation, the Member States may have to undergo another deflationary 
cycle; at current levels of unemployment, such an episode they can ill afford. 
Moderate wage growth will also contribute to fostering investment. The recent 
recovery of private investment is a reflection of the propitious economic prospects and 
of a wage growth inferior to labour productivity increases. The strength of investment 
expenditure, if sustained, will contribute to raising potential output and to fostering job 
creation. 
A wise use of the recovery will require that the Member States, first and foremost, 
consolidate their public finances. Sustainable fiscal positions are a necessary 
condition to support economic growth and durable employment creation. It is evident 
that the policies which are required to sustain long-term economic growth, foster job 
creation and reduce unemployment, and strengthen convergence are mutually 
consistent. 
24 
Recent developments in the foreign exchanges indicate how important stability of 
exchange rates within the Community is for furthering economic integration and 
completing the single market. Exchange rate changes can lead to resource 
misallocation when investment decisions, made on the expectation of depreciation-
induced competitiveness gains, prove ultimately obsolete when competitiveness is 
eroded either as a result of nominal exchange appreciation or because of higher 
inflation. Furthermore, the possibility of exchange depreciation undermines wage and 
price discipline since losses in competitiveness can be, temporarily at least, recovered 
through exchange devaluations; as a result, reductions in inflation and price stability 
become difficult to achieve. Finally, as devaluations offer a prospect of temporarily 
improving competitiveness, they raise the possibility of practising beggar-thy-neighbor 
policies, which are not compatible with the completion of the internal market. 
4. The Policies 
The principal task of economic policy at this stage of the cycle is to ensure that the on­
going recovery translates into non-inflationary, employment-creating, growth. In view 
of the risks impinging upon the economic outlook, and the progress yet to be 
accomplished in convergence, macroeconomic and structural policies should be 
directed towards securing price stability, fostering fiscal consolidation, and 
strengthening the dynamism and competitiveness of the Community. 
4.1 Macroeconomic policies 
The main task of macro-economic policies will be to maintain a stable framework 
which will prevent the appearance of the tensions which have contributed to the 
recession of 1992-93 and which will foster a continued steady increase in potential 
output. As the previous sections have underlined, key developments give cause for 
concern on both counts. At the same time, with the consolidation of economic 
growth and the approach to stage III of EMU, the challenges confronting the Member 
States have become more pronounced, while the diverging trends which have emerged 
as a result of exchange rate changes have also raised important questions about the 
appropriate economic policies. 
Securing and furthering the progress made on inflation, and sustaining economic 
growth is a crucial challenge for monetary and exchange rate policy in the current 
cycle. A necessary contribution to the task of defending price stability in this context 
will have to be provided by fiscal consolidation policies. While in virtually all Member 
-25 
States such policies are required, these are especially urgent in those Member States 
where fiscal deficits and rising debt burdens, and the associated inflation and exchange 
market developments, place the greatest burdens on the conduct of monetary policy 
and where the risks of a substantial acceleration of inflation are greatest. Equally 
necessary will be policies encouraging non-inflationary wage developments and, over a 
longer-term horizon, increased competition in product markets. 
Stability of exchange rates within the Community is essential for the proper 
functioning of the internal market. In Member States where fiscal positions are 
diverging and which have experienced exchange depreciations (Greece, Spain, Italy, 
and Sweden) it is essential that a bold and credible efforts are undertaken to foster 
fiscal consolidation. More generally, credible fiscal consolidation measures will 
contribute to reducing exchange rate instability. This will contribute not only to 
resolving concerns about competitive disruptions of the internal market, but it will also 
create the conditions for reductions in interest rates, and it will ultimately facilitate the 
implementation of the fiscal adjustment programme. 
Budgetary policy directed towards consolidation will play a crucial role in reducing 
the risks of an acceleration of inflation, of exchange rate instability, and of further 
worsening fiscal imbalances. 
Fiscal consolidation is necessary not only in order to foster stable inflationary 
expectations but also to sustain the progress made in reducing inflation. This is 
particularly important in Member States with persistent fiscal imbalances and persistent 
inflation (Greece, Italy, Spain). Failure to make decisive progress in redressing the 
fiscal imbalances, especially in an environment of strong economic growth, will 
increase uncertainty about the intentions of the fiscal authority. This uncertainty has 
been contributing to raising real interest rates and to, in turn, making fiscal 
consolidation more difficult to achieve in several Member States. 
Incomplete credibility of the fiscal consolidation plans may. also be reflected in 
exchange rate instability, higher real interest rates and increases in interest rate 
differentials vis-à-vis other countries. Domestic and international investors holding 
government debt require an increase in the rate of return, or a strong exchange rate, to 
compensate for the increased risk, a combination of circumstances which is inimical to 
both economic growth and to fiscal adjustment. The instability characterising 
-26-
exchange rates in Greece, Spain, Italy and Sweden is partly a reflection of the 
continuing lack of resolution of the fiscal difficulties. 
Over the medium term, fiscal consolidation will contribute to raising the level of 
national saving and will, through this channel, contribute to increasing the level of 
potential output. 
Respecting the fiscal convergence criteria remains an area where sustained efforts will 
have to be expended. According to the Spring 1995 forecast, seven Member States 
are expected to have deficits below the 3 per cent of GDP mark in 1996 (Denmark, 
Germany, Ireland, the Netherlands, Finland, and the UK; Luxembourg is expected to 
have a surplus). In these Member States the efforts to consolidate the public finances 
must be pursued with determination. In Belgium, France, and Austria, attaining the 
reference value for the deficit in 1996 would be within reach, provided that the 
adjustment effort gains renewed momentum. While no forecasts exist for the outer 
years, it is clear that for the remaining Member States the objective to respect the 
fiscal convergence criteria by 1999 must, even more than today, become a principal 
policy objective. 
The policy mix required in the individual Member States reflects the uneven 
distribution of policy risks. The Member States whose currencies have experienced 
depreciations over the recent months will likely see an increase in the inflationary 
pressures while the interest rate implications of the exchange rate instability will 
undoubtedly make budgetary consolidation more difficult. In general, these countries 
had already unsatisfactory starting positions. The depreciations will lead to higher 
import costs and, through the effects on export growth and economic activity in 
general, will contribute to narrowing the output gap. 
In these Member States the policy mix must be resolutely oriented towards containing 
the inflation risks and towards stepping up the efforts to consolidate budgetary 
positions. In these countries it will be particularly important to prevent, through the 
instruments available in each country, that the increase in imports costs may lead to a 
price and wage inflation spiral. 
In the Member States whose currencies have experienced appreciations, inflationary 
risks will be generally contained. However, given that the success of these countries 
in containing inflation owes much to the external constraint, it will be important to 
-27-
make sure that pay trends do not lead to reductions in investment profitability. There 
are indications that this may be happening in Germany. 
Investment profitability must still increase substantially in most countries if investment 
is to expand to the extent necessary to ensure sustained growth in the medium term. 
In some cases, the stability of exchange rates could only be maintained at the cost of 
increases in the interest rate differentials with Germany. This suggests that markets 
still perceive some risks in the budgetary positions of these countries. Determined 
corrective action could bring substantial benefits through the reduction, or the total 
elimination, of these differentials. 
4.2. Policies for greater competitiveness 
Structural measures aimed at promoting the competitiveness, dynamism and overall 
productivity of the Member States' economies are essential to the achievement of the 
Community's twin policy objectives of strong, employment-creating growth" and 
enhanced nominal convergence. Such measures are particularly important at the 
present time to strengthen economic growth, but also given the renewed anxiety about 
inflation especially in those Member States which have witnessed substantial 
depreciations of their currencies. 
The 1993 White Paper advocated reforms directed towards increasing the endogenous 
growth forces of the Community's economy as the means to securing the basis for its 
long-term prosperity. A variety of proposals aimed at making the Community 
economies more dynamic were subsequently incorporated in the 1993 and 1994 
Guidelines exercises. Such proposals, which were to be carried out at both the 
Community and individual Member State levels, were essential to the quest to promote 
the productivity and competitiveness necessary to underpin stronger growth and 
employment creation. 
Efforts at enhancing productivity and employment growth can only be successful if 
carried out in the context of a flexibly functioning economy which is capable of 
exploiting the opportunities generated by a rapidly changing technological and social 
environment. In this regard efforts are being undertaken to: 
exploit the opportunities associated with the internal market, an open world 
trading system and to safeguard the Community's competitiveness; 
accelerate the realisation of the Trans-European networks; 
28 
push through rapidly the Action Plan concerning the development of the 
information society; 
exploit the growth and employment potential offered by SMEs; 
and actively promote Community initiatives in Research and Development 
(R & D) and call for a greater degree of co-ordination of Member States' R&D 
policies. 
In relation to the internal market, strong efforts have been undertaken to transpose the 
relevant directives into Member States' legislation. However, transposition has been 
slow in the key sectors of insurance, company law, intellectual and industrial property, 
public procurement, new technologies and services, financial services, and freedom of 
movement. 
The Essen European Council stressed the intention of the Council to pay particular 
attention in the future to the competitiveness of the European economy. In this 
connection the Commission has established a high-level group to deal with 
competitiveness and to submit appropriate reports on these matters2. This the 
Commission duly followed through on with the formation of the Competitiveness 
Advisory Group at the beginning of 1995. The high-level Legislative Administrative 
Simplification Group ("Deregulation Group") has begun its work. It has stressed the 
need to monitor Community and national law for over-regulation and it requested the 
"Deregulation Group" to submit a report by June 1995. 
Initiatives in the area of the Trans-European networks in the transport, energy and 
environmental spheres have also been receiving a lot of attention. The Group of 
Personal Representatives of Heads of State or Government (the Christophersen group) 
submitted their report to the December 1994 European Council. It confirmed that the 
eleven priority projects decided upon at the Corfu European Council in June 1994 and 
the three new projects concerning the Nordic Member States and Ireland had already 
been started or were in a position to commence shortly. 
In relation to the establishment of the information society, this has been the object of 
an Action Plan adopted by the Commission in July 1994, which encompassed all 
See also "An Industrial Competitiveness Policy for the European Union", Communication from the Commission to 
the Council, COM(94) 319 final, September 14, 1994 and two companion documents: "Report on the 
Implementation of the Council Resolutions and Conclusions on Industrial Policy", SEC(95) 437 final, March 224 
1995 and "Action Programme and Timetable for Implementation of the Action Announced in the Communication on 
an Industrial Competitiveness Policy for the European Union", COM(95) 87 final, March 30,1995. 
29 
aspects addressed in the report of the Bangemann group. In its November 1994 
meeting this Council discussed the Commission's liberalisation timetable. The 
December European Council emphasised that the Commission's Action Plan and the 
conclusions of the Ministers for Industry and Telecommunications had set the agenda 
for the development of an information society. With regard to developments in 1995, 
as a follow-up to the G-7 ministerial meeting of February 1995, the Group of 
Commissioners on the Information Society was established. 
Raising the productivity of the Community's economy using these initiatives has the 
potential to contribute to strengthening employment creation. There is no necessary 
contradiction between productivity growth and employment creation. 
However three conditions must be met to ensure that the relative price mechanism 
makes possible a redistribution of productivity gains between sectors, enabling sectors 
with low productivity growth to create new jobs and to maintain similar wages for 
similar work: 
relative prices must continue to change without artificial rigidities, and the 
increased competition and flexibility on all markets should help this; 
Sectoral changes need to be socially acceptable, with market mechanisms being 
complemented by forward looking active policies and social dialogue; 
the overall macroeconomic rate of growth must be strong enough to allow for a 
positive balance between job creation and job destruction across sectors. 
4.3 Employment and labour market policies 
The economic recovery, if it progresses as predicted, could absorb by 1997 the cyclical 
component of unemployment. This component is estimated at about 3 million 
unemployed or only 2 percentage points of the present eleven per cent rate of 
unemployment in the Community. To absorb 3 million unemployed is indeed a first 
important step and an .essential one towards the achievement of the White Paper 
objectives. Nevertheless, in order to reduce, in a significant and progressive manner, 
the remaining 9 per cent of unemployment, it is necessary not only to achieve a strong 
and sustainable medium-term growth process, brought about by investment in order to 
create the necessary working posts, but it is also necessary to implement more active 
and more efficient labour market policies which may need to bring about significant 
changes in the areas of educational systems, labour law, work contracts, wage 
settlement arrangements and the social security systems. 
-m 
To this end, the Essen European Council, identified the following five priorities: 
1) Improving the employment opportunities for the labour force by promoting 
investment in vocational training, 
2) Increasing the employment intesiveness of growth, 
3) Reducing non-wage labour costs, 
4) Improving the effectiveness of labour market policies, 
5) Improving measures to help groups which are particularly hard hit by 
unemployment. 
Active and more efficient labour market policies contribute to the goal of increasing 
employment through three main channels. 
i) reinforce the growth potential itself by an improvement in the quality of human 
capital; 
ii) make growth more employment-creating without, however, negatively affecting 
the growth process itself; and finally 
iii) facilitate, to the extent that the new jobs will become available, the absorption of 
those unemployed who are still easily employable as well as to help the long-term 
...unemployed and particular disadvantaged groups who cannot easily occupy the 
available working posts and who risk being affected by social exclusion. 
Labour market policies in the above three areas constitute not only an indispensable 
complement to macroeconomic policies and to structural policies in the area of 
competitiveness but they also contribute to maintaining and reinforcing cohesion and 
social consensus inside the Union in the long and difficult process of absorbing 
unemployment. 
i) As regards the improvement of the quality of human capital, it is a matter of 
strengthening the systems of professional training, in particular that of the young, 
and to promote continuous training of the workforce in order to prepare and 
adapt the latter to social and technological changé in a world of free trade and in a 
process of strong structural adjustment. These policies will improve the flexibility 
of the labourforce, individual opportunities, and the comparative advantage of the 
European economy in comparison with other geographical regions of the world 
[Essenpriority n° I]. 
31 
These policies will increase the growth potential of the European economy and, 
like the policies for competitiveness, will generate their full benefit from the point 
of view of both their costs and their creation of employment, if simultaneously the 
effective rate of economic growth can develop without encountering the obstacles 
of inflation and of capacity constraints. 
ii) The contribution of the medium-term growth process to the reduction of 
unemployment is indispensable, but it must be complemented by a large effort, 
targeted and concrete, to increase the employment content of growth [Essen 
priority n° 2J. Actions in three areas, which must not hold back the growth 
process itself, are necessary in this regard: 
• the examination, by the social partners, of whether a reorganisation, a 
reduction and/or new patterns of working time could lead to increases in the 
employment content of growth without reducing the competitiveness of firms. 
In particular, the de-coupling of the working time of individuals from that of 
the enterprise may open promising opportunities: the existing capital stock -
equipment, premises, etc. - could be better exploited with significant 
productivity gains which may be used to encourage different working patterns 
among the employees. Development of part-time and other atypical forms of 
employment may also help. Progress in this area might also require a 
revision of existing regulations [Essen priority n° 2[. 
• increasing the incentives to employment by reducing non-wage labour costs, 
especially at the lower end of the wage and productivity scale, without 
harming other parts of the labour market; from a macroeconomic point of 
view this must be achieved in ways which do not compromise the reduction 
of budgetary deficits nor the competitiveness of enterprises. Reforms, 
including where appropriate alternative financing sources for social protection 
systems, are therefore required [Essen priority n° 3J; 
• easing the development of new employment opportunities and activities, e.g. 
those linked to the service society and environmental sustainability [Essen 
priority n° 2j. 
iii) The task of facilitating the absorption without tensions of the unemployed and the 
new entrants to the labour market, when the economy makes available the new 
working posts, concerns firstly the efficiency of labour and manpower offices and 
the promotion of flexibility in the areas of professional and geographical mobility 
32-
[Essen priority n°4[. An important part of the non-cyclical component of 
unemployment could be progressively integrated into working life by reasonable 
efforts in these areas provided that the recovery can be transformed into the 
medium-term growth and employment creation process described by the White 
Paper and aimed at by the present economic policy guidelines. 
Nevertheless, to significantly reduce the hard core of structural unemployment -
which could represent about half of the 9 per cent of non-cyclical unemployment -
different and much greater efforts will be necessary. It is a matter not only of 
strengthening the link between the granting of social allowances and the 
availability of the unemployed to accept work, but especially of reinforcing active 
labour market policies aimed at improving the "employability" of long-term 
unemployed workers by giving access to specific training and of concentrating the 
latter on particularly disadvantaged groups i.e. women, young people and older 
citizens who risk to being affected by social exclusion [Essen priority n°5J. 
These relatively expensive policies also only achieve their full benefit if labour, 
which in this way is rendered employable, has the opportunity in practice to find a 
job. Nevertheless, these policies must not only be evaluated in terms of their 
•immediate economic benefit; taking into account the inevitable and necessary time 
to significantly reduce the hard core of structural unemployment, these policies 
must also act to safeguard the existing human capital of the unemployed in order 
to prevent social exclusion and to maintain social cohesion. 
In order to better organise the implementation of the priorities identified by the Essen 
European Council, the Commission, on 8 March 1995, presented a Communication to 
the Council in which it suggests the implementation, in the context of Article 103 of 
the Treaty, of a surveillance procedure with regard to employment trends and policies. 
• 
• • 
• 
Bearing these considerations in mind, the Commission is proposing the present broad 
economic policy guidelines for the Community and the Member States which confirm 
the medium-term framework of those of June 1994, and assert the policy priority of 
reducing unemployment. 

3 3 
ISSN 1024-4506 
KOM(95) 228 slutlig 
DOKUMENT 
sv . w 
Katalognummer : CB-CO-95-270-SV-C 
ISBN 92-77-89591-8 
Byrån för Europeiska gemenskapernas officiella publikationer 
L-2985 Luxemburg