- term growth performance. they stimulate savings, capital formation, employment and innovation. and they facilitate the task of the monetary policy - maker in maintaining price stability. sound public finances should rely on automatic stabilisers, rather than discretionary fine - tuning, to dampen the cyclical fluctuations of aggregate demand. theory suggests that there are delays and risks associated with the latter - getting the timing wrong may result in pro - cyclical polices and make a monetary policy orientated towards price stability more difficult. in the medium term, fiscal policies can best contribute to sustaining non - inflationary growth by pressing ahead with fiscal consolidation. ultimately, over the economic cycles, growth will reflect conditions on the supply side of the economy. it is therefore microeconomic, and not macroeconomic, policies that can promote the supply of labour and capital and their efficient allocation, further innovation and the diffusion of new technologies, and as a result, mitigate problems such as structural unemployment. structural reforms in the labour and goods markets are a key element of any long - term strategy to improve investment, growth and employment prospects. first, more flexible markets increase the speed with which countries can adapt to economic shocks, thereby speeding up economic recovery. second, increased competition in labour and product markets is conducive to a high level of innovation and the rapid spread of technological progress. this in turn supports long - term growth, without contributing to inflationary tendencies. third, structural reform may facilitate the transmission of monetary policy. in more rigid economies, interest rate changes are transmitted to prices after a longer delay, and structural barriers can prevent the economic efficiency gains of the primary objective of monetary policy - price stability - from being fully realised. it is important to mention here the close interplay between rigidities in capital, labour and product markets, which can strengthen one another. these interdependencies mean that structural reforms in any one of these markets will have an impact on the functioning of the others. it must be emphasised therefore that only a comprehensive reform programme can create the necessary conditions for stronger economic dynamism. the need for structural reforms tends to become most urgent and evident to policy - makers during economic downturns. but don't forget that structural reforms do not provide short - term solutions to economic problems. although they can have positive short - term confidence effects, it normally takes time for their benefits to unfold. hence i cannot emphasise enough the need to speed up the pace of structural reforms in capital,

on previous occasions, there are still discussions in some quarters, even at this late stage of the preparations, on whether it might not be preferable to go back on our decision not to frontload euro banknotes to the general public. as i have seen, your committee, too, is preparing a resolution calling for a review of this decision. in this context, i should like to stress that the governing council of the ecb does not intend to change its decisions with regard to the front - loading of euro banknotes to the general public. the reasons for this decision, which i have already spelled out in detail on other occasions and which i am willing, if necessary, to elaborate further, are still valid and there are, according to our assessment, no new elements which would justify a renewed reflection on this issue at this late stage of preparations. we are certainly aware that retailers, albeit not all of them, are very vocal in their demands for a frontloading of euro banknotes to the general public. it is also indisputable that there might be specific situations in support of this request. however, the ecb has to take a global perspective covering all aspects and, especially, the general interest. having said this, i should like to stress that, in any case, the smooth conduct of the cash changeover will require particular efforts by all parties concerned, be they banks, businesses or citizens. however, quite a number of measures have been prepared or are under consideration which should help to smooth the introduction of the euro banknotes and coins, in particular during the very first days of the cash changeover. in this respect, i should like to mention the conversion of atms already in the early hours of 1 january as well as their provision with lower - denomination banknotes. moreover, the opening of banks on 1 january 2002, as has so far been foreseen in some countries and might be considered by others, should help smooth the specific challenges during the early stages of the changeover. finally, i should like to stress that the various extensive and well - prepared information campaigns should familiarise the general public with the organisation of the cash changeover. all in all, the challenges with regard to the cash changeover should, of course, not be underestimated. at the same time, however, i am not aware of any indications that could place the effectiveness of the careful and comprehensive preparations for a smooth and successful cash changeover in doubt. 3. issues related to