Commission Communication - Second implementation report on the 2003-2005 BEPGS (presented in accordance with Article 99 (3) of the EC Treaty) {SEC(2005)91}
Date: 2005-01-27
Institutions: European Commission
Subjects: EU Member State, application of EU law, economic policy

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.1.2005 
COM(2005) 8 final 

. 

COMMISSION COMMUNICATION  

Second Implementation Report on the 2003-2005 BEPGs 

(presented in accordance with Article 99 (3) of the EC Treaty) 

{SEC(2005)91} 

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Second assessment of 
progress made in 
implementing the 
Broad Economic 
Policy Guidelines… 

…providing input for 
the 2005 Spring 
Report 

Shift of focus towards 
policy measures 

Moderate economic 
recovery with subdued 
domestic demand 

Macroeconomic 
policies remained 
accommodative  

This Communication reviews progress made in implementing the EU’s 
medium-term economic policy strategy as set out in the 2003-05 Broad 
Economic  Policy  Guidelines  (BEPGs).1  Having  been  adopted  in  2003 
and  updated  in  20042  to  take  account  of  the  Union’s  enlargement,  the 
guidelines focus on the contribution that economic policies can make to 
the Lisbon strategy, both through the pursuit of sound macro-economic 
policies  and  vigorous  economic 
reform.  This  Communication 
summarises  the  main  findings  of  the  Implementation  Report  on  the 
BEPGs  that  the  Commission  services  have  prepared  as  part  of  the 
“Implementation Package”, also comprising the draft Joint Employment 
Report  and  the  Implementation  report  on  the  Internal  Market  Strategy. 
The  Implementation  Package  provides  essential  background  to  the 
Commission’s  2005  Spring  Report  and  the  Mid-Term  Review  of  the 
Lisbon Strategy. 

to 

the  preliminary  assessment  made 

Compared 
this 
Implementation  Report  has  stepped  up  the  assessment  to  identify  clear 
progress  made,  or  lack  thereof.  Thus,  to  some  extent  the  focus  has 
shifted from policy intentions to policy measures. The assessment takes, 
however,  due  account  of  the  limited  time  the  newly  acceded  Member 
States have had to follow-up on the guidelines. 

last  year3, 

Shortly after the adoption of the 2003-05 BEPGs, the economy started 
to  turn  around  in  the  second  half  of  2003.  The  recovery  developed 
further in 2004 supported by a favourable global economic environment. 
However,  with  an  estimated  growth  rate  for  the  EU  of  2.5  per  cent  in 
2004 (and around 2 per cent for the euro area) the economic recovery is 
rather  moderate  and  has  yet  to  be  consolidated  by  a  strengthening  in 
domestic  demand.  Some  improvements  can  be  noted  in  the  labour 
market  where  employment  growth  recovered  to  0.4  per  cent  in  2004 
supported  by  moderate  wage  developments.  Inflation  is  projected  to 
have  increased  only  slightly  compared  to  2003  to  2.2  per  cent  in  both 
the EU-25 and the euro area, despite developments in energy prices that 
have been mitigated in the euro area by an appreciation of the euro. 

In  a  context  of  persistent  uncertainties  concerning  the  strength  of  the 
recovery  and  rising  energy  prices,  macroeconomic  policies  remained 
accommodative  in  2004.  The  ECB  maintained  its  key  policy  interest 
rates unchanged. Some central banks in the Union raised interest rates to 
contain  inflationary  pressures.  Overall,  fiscal  policies  in  the  EU-15 
remained  broadly  neutral  in  2004  as  indicated  by  the  only  minimal 
change  in  the  discretionary  component,  while  automatic  stabilisers 
generally  played  freely  to  support  economic  activity.  In  some  new 
Member States, the consolidation of public finances has contributed to a 
more  accommodative  monetary  policy  stance  than  otherwise  would 
have been the case. 

1 

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3 

Council recommendation of 26 June 2003 on the broad guidelines of economic policies of the Member 
States  and  the  Community  (for  the  2003-05  period),  2003/555/EC,  published  in  the  Official  Journal 
(No. L 195/1 of 1 August 2003.  
Council recommendation of 5 July 2004 on the 2004 update of the Broad Economic Policy Guidelines 
for the period 2003-2005. 
Commission  Communication  ‘First  report  on  the  implementation  of  the  2003-2005  Broad  Economic 
Policy Guidelines’, COM(2004) 20 final, adopted on the 21 January 2004. 

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Persisting budget 
deficits 

In 2004, around one 
third of the Member 
States had deficits 
exceeding 3% of GDP  

Maintained pace of 
labour market reforms 

Only  limited  progress  was  made  in  2004  in  reaching  sound  budgetary 
positions in several Member States, which recorded high budget deficits 
in 2003. Coupled with still below potential growth in 2004, this implied 
that the average nominal deficit increased to nearly 3 per cent of GDP in 
the euro area and remained unchanged at a marginally lower level in the 
EU  as  a  whole.  Behind  this  there  are,  however,  sizeable  differences 
across  Member  States:  the  lacklustre  performance  of  some  Member 
States  contrasts  with  the  sound  positions  of  ‘close  to  balance  or  in 
surplus’ reached or maintained by a number of other Member States in 
2003 or 2004 (Belgium, Denmark, Estonia, Spain, Ireland, Luxembourg, 
Finland and Sweden).  

Nominal budget balances deteriorated in more than half of the Member 
States: a surplus turned negative in four Member States and the deficits 
worsened  in  ten  more  and  markedly  so  in  Greece  and  Poland.  On  the 
basis  of  the  Commission’s  Autumn  2004  Economic  Forecasts,  nine 
Member  States  are  expected  to  have  had  deficits  exceeding  the  3 per 
cent  of  GDP  ceiling  by  a  wide  margin  in  2004.  This  also  reflects  the 
initial  budgetary  position  in  several  of  the  new  Member  States, 
reflecting  the  ongoing  transition  process  and  the  different  challenges 
facing fiscal policies.  

Excessive  deficits  have  already  been  identified  for  Portugal  in  2002, 
Germany  and  France  both  in  2003,  while  eight  more  countries  were 
found to be in an excessive deficit situation in 2004, namely Greece and 
the Netherlands and, following accession, the Czech Republic, Cyprus, 
Hungary,  Malta,  Poland  and  Slovakia.  While  the  excessive  deficit 
situation was abrogated in 2004 in the case of Portugal, and the deficit 
in the Netherlands is estimated to have returned to just below 3 per cent 
of  GDP  in  2004,  Germany,  France  and,  above  all,  Greece  (among  the 
former  EU-15  Member  States)  still  struggle  with  high  deficits. 
However,  implementation  of  fiscal  consolidation  efforts  in  countries 
under  the  EDP  seems  broadly  on  track,  with  the  exceptions  of  Greece 
and Hungary.  

The pace of labour market reforms appears to have been maintained in 
2004, above all reflecting the measures recently adopted in Germany, as 
well  as  significant  progress  in  Denmark,  the  Netherlands,  Ireland  and 
Austria  (see  also  the  draft  Joint  Employment  Report  2004-2005).  In 
general, there is a tendency for many measures to remain focused on tax 
cuts, lifelong learning strategies or active labour market policies, while 
fewer  initiatives  (or  less  comprehensive  proposals)  related  to  benefit 
systems, wage bargaining and employment protection legislation.  

Measures to enhance 
work incentives 
continued to focus on 
tax reforms  

Several  Member  States  adopted  tax  reforms  to  increase  incentives  to 
enter  or  stay  in  the  labour  market  and  some  Member  States  (e.g.  the 
Czech Republic, Denmark, Germany, France and the Netherlands) also 
lowered  the  duration  of  unemployment  benefits  and/or  tightened 
eligibility and job search criteria.  

A few Member States 
took measures to 
enhance adaptability 

Labour  markets  must  be  made  more  flexible  while  providing  workers 
with appropriate levels of security. In 2004, only a few Member States 
took  measures  to  increase  the  adaptability  of  work  organisation. 
Notably,  in  Germany  employment  protection  legislation  loosened  for 
small firms, fixed-term contract duration was increased and the trend of 

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reduced  working  time  in  specific  branches  started  to  reverse.  France 
amended  the  redundancy  legislation.  However,  no  other  Member  State 
tackled  the  sometimes  overly  strict  employment  protection  legislation 
on permanent contracts, or the segmentation of the labour market across 
different  types  of  contracts.  In  Italy,  while  reforms  were  introduced  to 
support  a  rise  in  labour  force  participation,  the  increased  variety  of 
labour  contracts  may  further  heighten  the  already  visible  segmentation 
of the labour market. 

Most Member States continued to foster occupational mobility through 
lifelong  learning  strategies  and  active  labour  market  programmes. 
Regional mobility was addressed in some Member States by improving 
incentives in tax/benefit systems, or, as in the case of Spain, by reducing 
rigidities in the housing market.  

Progress is clearly 
insufficient to reach 
all employment targets 
set for 2005 / 2010 

Recent progress notwithstanding, it is increasing unlikely that the Union 
will reach the Lisbon and Stockholm employment targets (possibly with 
the exception of the female employment rate target) unless further and 
comprehensive reforms are swiftly implemented by all Member States. 
A  sustained  improvement  in  economic  dynamism  would  also  foster 
future employment growth.  

Unfavourable 
developments in 
productivity growth 

The pace of Internal 
Market integration 
has slowed down… 

Reforms to improve the productivity performance of the EU are equally 
important as labour market reforms. Since the turn of the century hourly 
labour  productivity  growth  has  slowed  down  further  in  a  number  of 
Member  States,  going  into  negative  territory  in  2003  in  Italy,  the 
Netherlands  and  Portugal.  It  can  be  partly  related  to  a  lower  level  of 
investment per employee as a result of the higher rate of job creation in 
the  second  half  of  the  1990s.  However,  this  can  only  explain  a  small 
share  of  the  observed  productivity  slowdown.  More  important  is  the 
slowdown in the rate of technological progress stemming from the slow 
reorientation  to  high  productivity  growth  sectors,  the  relatively  small 
size of the EU’s ICT production industry, and its apparent slowness in 
reaping  the  productivity  enhancing  benefits  of  ICT  in  a  range  of  ICT-
using industries. 

Raising  productivity  levels  requires  the  implementation  of  a  vigorous 
and comprehensive set of reforms to fully reap the benefits of economic 
integration.  However,  as  already  observed  in  the  first  Implementation 
Report on the 2003-2005 BEPGs, the record is mixed. Several indicators 
(intra  EU-trade,  price  convergence)  show  that  the  pace  of  Internal 
Market  integration  has  slowed  down,  in  part  as  a  result  of  a  lower 
economic activity. Transposition of Internal Market directives is behind 
schedule and only Spain and Lithuania have managed to bring down the 
percentage  of  non-transposed  directives  below  the  agreed  1½  per  cent. 
The high level of infringement cases in Germany, Greece, Spain, France 
and Italy is also a source for concern. In the area of public procurement, 
the  value  of  openly  advertised  projects  continues  to  increase,  but  still 
accounts for only 16 per cent of the total value of public procurement.  

…while liberalisation 
of network industries 
progressed and 
competition policies 
became more effective 

Fostering  competition  in  network  industries  remains  a  continuing  task. 
Further  steps  have  been  taken  in  2004  towards  the  liberalisation  of 
network  industries,  but  effective  competition  is  not  always  ensured  as 
the  still  very high  market  share  of  incumbents  seems  to  indicate.  With 
the implementation of the new regulatory framework, competition in the 

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e-communications  services  sector  is  intensifying  in  most  markets, 
bringing  increased  benefits  to  consumers.  Eight  Member  States  made 
further steps towards a full liberalisation of the energy market (Belgium, 
Denmark,  France,  Ireland,  Italy,  Luxembourg,  the  Netherlands  and 
Portugal). In many new Member States, competition in network markets 
is  also  increasing  as  their  economies  have  been  opened  up  to 
international  competition.  The  effectiveness  of  competition  policy  has 
been  enhanced  by  the  modernisation  of  the  Community  antitrust  and 
merger regimes and a, albeit modest, strengthening of the Commission’s 
investigative powers. Related to this development, which implies more 
responsibility  for  national  competition  authorities,  Member  States 
(notably Ireland, the Netherlands, Spain and the United Kingdom) made 
a welcome step by providing additional resources. 

In  2004,  significant  steps  were  made  in  providing  the  appropriate 
regulatory  framework  for  more  efficient  capital  markets  and  further 
financial  integration  in  the  EU.  The  implementation  phase  of  the  Risk 
Capital  Action  Plan  (RCAP)  has  led  to  a  well-developed  buy-out 
market,  but  venture  capital  investment  for  early  stage  companies 
remains weak. As the legislative phase of the Financial Services Action 
Plan  (FSAP)  draws  to  an  end,  the  focus  has  started  to  shift  to  the 
law.  Rates  of 
transposition  of  adopted  measures 
transposition of directives continue to vary widely across directives and 
Member States, even if transposition appears sufficient in 2004. 

into  national 

With  the  Commission’s  May  2004  Communication  on  clearing  and 
settlement  and  the  setting  up  of  the  Clearing  and  Settlement  Advisory 
and  Monitoring  Expert  Group,  some  progress  has  been  made  towards 
fostering  an  integrated,  safe  and  efficient  post-trading  environment  for 
EU  securities  markets.  Progress  has  also  been  made  in  strengthening 
corporate governance, with the adoption of EU-level as well as domestic 
initiatives  in  this  respect.  Reflecting  market  developments,  Member 
States  have  continued  to  improve  their  cross-sectoral  arrangements  for 
supervision  while  significant  steps  were  taken  to  improve  cross-border 
cooperation. 

in 

than 

is  still 

less  dynamic 

Business  framework  conditions  appear  to  be  improving,  even  if 
the  US. 
entrepreneurial  activity 
Governments are making an effort to reduce the time and costs required 
for  setting-up  a  company  and  to  provide  services  via  the  internet  (e.g. 
Belgium,  France,  Hungary,  Poland  and  Slovakia).  Greater  attention  to 
regulatory  reform  is  also  visible  at  the  European  level.  Measures  are 
being implemented in Member States to reduce the costs of complying 
with corporate tax requirements (which can be very high for SMEs). In 
addition,  measures  have  been  taken  to  widen  the  corporate  tax  base, 
which may increase the scope for a reduction of tax rates. 

Progress made in 
financial market 
integration 

Improved climate for 
doing business 

Only gradual progress 
towards the knowledge 
based economy… 

… with Lisbon target 
on R&D at risk 

Despite  different  measures  taken  to  enhance  the  transition  towards  a 
knowledge  based  economy,  the  progress  is  only  gradual.  The  EU 
continues to substantially lag behind the US in research and innovation 
(R&D).  The  last  cyclical  slowdown  in  business  investment  and  FDI 
hampered  knowledge  and  technology  diffusion,  which  is  particularly 
the  new  Member  States.  R&D-expenditures  have 
important  for 
increased  only  marginally  to  2  percent  of  GDP  in  2002,  making  the 
target  for  R&D-investments  of  3  per  cent  of  GDP  by  2010  (of  which 

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two-thirds  to  be  financed  by  the  private  sector)  virtually  unattainable, 
without  major  initiatives.  Some  Member  States  (Sweden  and  Finland) 
have high R&D-ratios, whereas others have experienced declining ratios 
since  1999  (Greece,  Ireland  and  the  Netherlands).  Nearly  all  Member 
States  have  adopted  national  targets  for  increased  public  and  private 
investment in research and an increasing number of them are indirectly 
supporting  business  R&D  through  fiscal  incentives.  The  new  Member 
States  should  benefit  from  knowledge  transfer  via  foreign  direct 
investments (FDI). This transfer is essential for a process of catching up 
in these Member States in order to increase their specialisation in higher 
value-added  activities.  Public  investment  in  human  resources  shows  a 
slight increase and varies considerably between Member States. Despite 
encouraging  progress,  further  efforts  will  be  necessary  to  achieve  the 
2010 targets for adult participation in lifelong learning and early school 
leavers.  Little  progress  has  been  made  in  increasing  the  share  of  22 
years  old  that  have  completed  upper  secondary  level  education. 
Summing  up,  while  Member  States  are  making  efforts  to  reform 
research, innovation, education and training systems, there is a risk that 
the  current  pace  of  reform  will  not  enable  the  Union  to  attain  the 
objectives  set  at  Lisbon  and  Barcelona  regarding  the  knowledge-based 
economy.  

In general, gross public investment (as a percentage of GDP), which was 
on a downward path since the 1970s, stabilised at around 2½ per cent of 
GDP between 2000 and 2004. The European Growth Initiative stressed 
the role of public investment in key transport infrastructure to strengthen 
the  dynamics  of  the  Internal  Market.  A  Quick-start  list  was  identified 
and  is  now  part  of  the  TEN  priorities  approved  by  the  Union  in 
April 2004.  In  addition,  the  EU-budget  is  significantly  financing 
investments in e.g. infrastructure, R&D and education, with the aim of 
contributing to raising both productivity and employment. 

to  address 

Besides  achieving  higher  employment  and  potential  growth  rates,  the 
the  economic  and  budgetary 
agreed  policy  strategy 
consequences  of  ageing  also  hinges  on  reducing  debt  levels  and 
reforming  pension  systems.  No  significant  progress  has  been  made  in 
recent years in the reduction of public debt, which remained above the 
reference value of 60 per cent of GDP in 2004 in both the EU as a whole 
and in the euro area. The continuing high debt is due to the low priority 
given  in  a  number  of  Member  States  to  budget  consolidation  and  the 
weak  economic  growth  environment.  After  major  pension  reforms  in 
2003, notably in France and Austria, important measures were taken in 
2004  in  e.g.  Italy  and  Slovakia,  while  others  took  more  limited  action 
(e.g. Latvia raised the minimum retirement age and Portugal introduced 
a penalty for civil servants retiring early) and sometimes with the aim of 
softening  the  impact  of  earlier  reforms.  Analysis  shows  that,  despite 
recent efforts to ensure the long-term sustainability of public finances, it 
remains an important issue in the majority of Member States, notably in 
Belgium, Cyprus, the Czech Republic, Germany, Greece, Spain, France, 
Hungary, Italy, Malta, Poland, Portugal, Slovenia and Slovakia. 

Long-term 
sustainability of public 
finances not yet 
secured in the majority 
of Member States 

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Social sustainability 
hampered by labour 
market situation 

Better progress made 
in taking action to 
improve 
environmental 
sustainability 

Mixed progress in the 
euro area where 
budget policies 
continue to 
disappoint… 

Progress  in  improving  social  sustainability  continues  to  be  limited  in 
2004. Above all, the relatively weak labour market performance, with a 
slow  employment  growth  in  2003-2004,  continues  to  hamper  overall 
progress,  as  employment  plays  a  major  role  in  lifting  people  out  of 
poverty  and  social  exclusion.  Recent  measures  taken  by  Slovakia, 
Hungary, the Czech Republic, Slovenia and Estonia aim at modernising 
tax/benefit systems or facilitating employment for vulnerable groups. It 
is thus important to strengthen the mutually reinforcing effect of policies 
promoting  economic  growth,  employment  and  economic  and  social 
cohesion. 

Compared to 2003, better progress was made in 2004 in taking action to 
improve environmental sustainability. In the area of climate change, the 
preparations  for  the  Community  trading  scheme  for  greenhouse  gas 
emissions  were  finalised  in  2004  allowing  the  scheme  to  start  on 
1 January 2005. Some Member States, however, have not notified their 
complete national action plans for emission allowances in time and were 
therefore  not  able  to  participate  in  the  scheme  from  the  start.  Russia’s 
ratification of the Kyoto protocol means that it will enter into force from 
2005, increasing the pressure to implement effective policies to reduce 
greenhouse gas emissions. So far reduction in greenhouse gases are not 
sufficient  to  put  the  EU-15  on  a  linear  path  to  meeting  its  Kyoto 
commitments.  Several  Member  States  took  market-based  measures  to 
encourage  energy  efficiency  (e.g.  Belgium  and  Italy)  or  to  support  the 
use  of  alternative  fuels  (e.g.  France,  Austria,  Sweden  and  the  United 
Kingdom); however, others weakened the price signal of higher energy 
prices  by  lowering  fuel  taxes.  In  the  transport  sector,  a  few  Member 
States (e.g. Belgium, Cyprus and Austria) joined the group of those who 
have adjusted their vehicle taxation systems to take into account carbon 
dioxide  and/or  particulate  emissions.  Furthermore,  road  pricing 
measures  for  heavy  lorries  entered  into  force  in  Austria  and  finally  in 
Germany,  which  are  useful  to  achieve  a  better  intermodal  balance. 
Regarding  the  progress  on  electricity  from  renewable  energy  sources, 
four countries have made important efforts through application of feed-
in  tariffs  (Denmark,  Germany  and  Spain)  and  through  a  de-taxation  of 
renewable energy sources (Finland). 

Efforts  in  increasing  the  efficiency  of  the  whole  energy  supply  and 
demand  chain  should  be  pursued  in  order  to  reduce  European  energy 
dependency,  ensure  affordable  prices  to  all  end  consumers  (both 
industries  and  households),  as  well  as  to  comply  with  international 
obligations under the Kyoto Protocol.  

Progress in response to the guidelines for the euro area remains mixed. 
While  the  macro-economic  policy  mix  continued  to  be  supportive  to 
growth  -  with  a  growth  supportive  monetary  stance  accompanied  by  a 
broadly  neutral  fiscal  stance  -  the  need  for  further  and  comprehensive 
economic  reforms  is  illustrated  by  a  sluggish  and  belated  recovery  in 
comparison  to  other  industrialised  economies.  Further  reforms  that 
reduce  structural  rigidities  and  the  attainment  of  sufficient  margins  for 
automatic  stabilisation  through  the  budget  are  still  required  in  order  to 
strengthen  the  capacity  for  adjustments  to  shocks.  The  lack  of 
significant  progress  on  budgetary  consolidation  by  any  of  the  seven 
Member States that had not achieved a position of ‘close-to-balance or 

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…but where economic 
management will 
benefit from a 2-year 
presidency of the 
Eurogroup 

Overall,  progress 
implementing 
2003-2005 
leaves  much 
desired  

in 
the 
BEPGs 
to  be 

in surplus’ in 2003 is, also in this respect, a particular source of concern. 
Although  some  improvement  in  the  cyclically-adjusted  budget  deficits 
was  recorded  in  France  and  the  Netherlands,  the  situation  further 
deteriorated  in  Germany,  Greece,  Italy  and  Austria.  More  positively, 
there  appears  to  have  been  a  narrowing  of  inflation  differentials  in  the 
euro area for a second consecutive year. The decision in 2004 to create a 
stable two-year presidency for the Eurogroup as of 2005 should benefit 
its functioning and will result in continuity in the euro area attendance at 
international meetings. This can be viewed as an important first step in 
strengthening the voice of the euro area on the world stage. 

limited 

follow-up  of 

relatively  good 

in  several  Member  States.  Concerning 

Summing  up,  the  overall  conclusion  from  this  second  Implementation 
Report on the 2003-2005 BEPGs is that progress continues to be mixed. 
Some  Member  States  are  making  better  progress  than  others.  For 
instance,  a 
the  country-specific 
recommendations  has  been  given  by  Belgium,  Denmark,  Ireland,  the 
Netherlands,  Finland  and  the  United  Kingdom,  while  progress  can  be 
the 
considered 
recommendations to the new Member States, addressed just half a year 
ago,  the  assessment  of  their  implementation  indicates  that,  albeit  with 
different  speeds,  it  goes  in  the  right  direction,  notably  in  Cyprus  and 
Slovakia.  Alternatively,  when  focusing  on  the  development  by  sector, 
relatively good progress has been made in making the overall business 
environment  more  favourable,  in  enhancing  the  effectiveness  of 
competition policies and in improving environmental sustainability. The 
pace  of  labour  market  reforms,  which  was  stepped  up  somewhat  in 
2003,  appears  to  have  been  maintained.  Progress,  however,  has  been 
limited as regards the ongoing transition to a knowledge-based economy 
where a substantial gap remains between the EU and the US. The pace 
of  Internal  Market  integration  also  appears  to  have  slowed  down  with 
limited progress noted on the transposition of Internal Market directives 
and  a  continued  high  level  of  infringement  cases.  Furthermore,  the 
limited  progress  in  several  Member  States  to  reach  a  sound  budgetary 
position and/or correct an excessive deficit continues to be a source of 
concern.  Although  some  progress  was  made  in  improving  fiscal 
sustainability  with  inter  alia  pension  reforms  in  some  Member  States, 
debt ratios remain high and long-term sustainability is not yet secured in 
14  of  the  Member  States  in  2004.  Taken  together,  the  overall  pace  of 
reform  remains  unchanged  in  2004.  It  is  clear  that  with  the  current 
reform  pace,  full  implementation of  the  2003-2005 BEPGs  will  not  be 
secured, making it difficult to fulfil the Lisbon ambitions. 

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