AGAIN ROSE IN 1983 . THEREFORE , THE FINANCING NORMS FOR THE ECONOMY SHOULD BE DEFINED FROM 1984 ONWARDS IN TERMS NOT ONLY OF TOTAL DOMESTIC CREDIT , AS HERETOFORE , BUT ALSO OF MONEY SUPPLY GROWTH . A FURTHER SUBSTANTIAL INCREASE OF PUBLIC ISSUING OF GOVERNMENT SECURITIES WILL BE ESSENTIAL TO ACHIEVE THESE AIMS . THIS IMPLIES THAT REAL INTEREST RATES MUST REMAIN DEFINITELY POSITIVE , IN LINE WITH THE INTERNATIONAL TREND .
DEMAND MANAGEMENT AS OUTLINED HERE SHOULD CREATE APPROPRIATE CONDITIONS TO HELP THE ECONOMY TO FACE ITS STRUCTURAL PROBLEMS . THE MOST SERIOUS OF THESE IS CLEARLY THE STEADY INCREASE IN UNEMPLOYMENT WHICH BEARS WITNESS TO AN INADEQUATE CONTROL OF COSTS , THE CHRONIC WEAKNESS OF PRODUCTIVE INVESTMENT , AND THE GROWING PROPORTION OF INVESTMENTS IN LABOUR SAVING CAPACITY . IT IS THEREFORE ESSENTIAL TO MAKE COST CONTROL AND EMPLOYMENT POLICY COMPATIBLE ON A LASTING BASIS : THIS MEANS LONG-TERM WAGE RESTRAINT , WHICH CAN BE ACHIEVED IF THE OPPORTUNITIES PROVIDED BY THE AGREEMENT OF 22 JANUARY 1983 ARE USED TO IMPROVE PROFITABILITY AND NOT SIMPLY TO PUSH AHEAD WITH DISINFLATION . SPECIAL CARE WILL BE REQUIRED HERE TO ENSURE THAT THE BENEFITS TO BE EXPECTED IN THE MEDIUM-TERM FROM LIMITING AGREED INCREASES ARE NOT COMPROMISED BY WAGE DRIFT OR SHORTENING OF WORK TIME WITH ADVERSE EFFECTS ON UNIT LABOUR COSTS AND POSSIBLE FURTHER STEPS .
IN VIEW OF THE NEED TO RESTRUCTURE THE SYSTEM OF PRODUCTION SO AS TO IMPROVE COMPETITIVENESS AND EMPLOYMENT TRENDS , THE GRADUAL REDUCTION OF THE PUBLIC DEFICIT IS A PRIORITY . THIS REDUCTION IS NECESSARY NOT ONLY TO AVOID FINANCIAL CROWDING OUT OF PRIVATE FIRMS , BUT ALSO , AND ESPECIALLY , TO IMPOSE A MORE EFFICIENT DISTRIBUTION OF PUBLIC EXPENDITURE AND MORE GENERALLY TO IMPROVE RESOURCE ALLOCATION . THE EFFORT SHOULD THUS BE CONCENTRATED ON PUBLIC EXPENDITURE BY SUBJECTING THE MANAGEMENT OF DEPARTMENTS OF THE SOCIAL SECURITY SYSTEM AS WELL AS PUBLIC AND SEMI-PUBLIC ENTERPRISES TO STRICTER EFFICIENCY CRITERIA . IN THE MEDIUM TERM MEASURES TO REDUCE THE DEFICIT SHOULD AVOID AS FAR AS POSSIBLE A FURTHER INCREASE IN THE BURDEN OF TAXATION AND CONTRIBUTIONS UNLESS PARALLEL STEPS ARE TAKEN TOWARDS A MORE EQUITABLE TAX SYSTEM .
TABLE 10
ITALY : MAIN ECONOMIC AGGREGATES , 1961 TO 1984 ( SEE OJ )
IN LUXEMBOURG , ECONOMIC ACTIVITY IN 1983 HAS BEEN AFFECTED BY THE STEEL CRISIS AND THE SLACKNESS OF DOMESTIC DEMAND . GROSS DOMESTIC PRODUCT IN REAL TERMS FELL BY 2,4 % . DESPITE WAGE RESTRAINT IN THE STEEL SECTOR AND THE TEMPORARY SUSPENSION OF WAGE INDEXATION , PRICES HAVE CONTINUED TO RISE FAIRLY FAST , NOT ONLY BECAUSE OF THE DELAYED EFFECTS OF THE DEVALUATION , BUT ALSO BECAUSE OF THE INCREASED RATES OF VALUE ADDED TAX .
ECONOMIC ACTIVITY WILL PROBABLY REMAIN SLACK IN 1984 . ON THE EXPORT SIDE , THE OUTLOOK FOR LUXEMBOURG'S MAIN INDUSTRIES IS NOT VERY BRIGHT . MOREOVER , ALTHOUGH THE LIMITATION OF WAGE INDEXATION IN 1984 TO A SINGLE ADJUSTMENT WILL