decision - making process. if done correctly and with the necessary commitment on behalf of the member states, european leaders should be able to manage a revival of the lisbon agenda comparable to that achieved a decade ago on emu. structural reforms will have enormous benefits for the citizens of the euro area. these reforms are crucial for sustained noninflationary growth and employment, and they are therefore also important for maintaining social cohesion in the long run. confidence among european citizens in the future is vital for a stronger economic recovery and stable growth. the continued low level of consumer confidence is also related to uncertainties about the appropriate path for structural reforms in many euro area countries. further progress in the implementation of necessary structural reforms is key to stronger confidence, and such reforms create the conditions for consumption and investment, for growth and job creation. let me emphasize a few points which in my opinion are crucial now to a successful revival of the lisbon agenda. • a first message is : enough talk, now is the time for action! the necessary reform areas have been sufficiently discussed and have been clearly identified. we do not need more reform papers now, we need implementation. • a second message is : set clear priorities and use intelligent sequencing! otherwise both politicians and electorates will simply be overwhelmed and discouraged. • a third message is : create clear responsibilities! it is not sufficient for european leaders to issue declarations and conclusions on what “ the community ” needs to do. we need a binding commitment by each member state on the concrete reform steps that it will implement until 2010. the maastricht convergence criteria would probably never have been fulfilled if there had only been reliance on a general intention that the community requires price stability, sound public finances and the like. you need to break objectives down to the national level and create incentives to ensure implementation. • a fourth message is : talk to people and get them actively involved! i think a major obstacle to implementation of the lisbon agenda by the various governments is a lack of communication with the public. it is thus not surprising that it seems to be rather difficult for people to accept the reforms. thus, each member state government needs to convince its citizens of the enormous potential and opportunities released by structural reforms. after all, what we aim for is higher per capita income, replacing redundant activities with more welfare - generating ones, investment in skills and education, a knowledge - based society, more innovation and sufficient research and development. i would think that these objectives are of such a genuinely positive

multi - country monetary union. if applied appropriately, the framework ensures long - term sustainability and sufficient room for an automatic smoothing of business cycles. the governing council agrees with the commission that the implementation of the stability and growth pact could be further improved, in particular in terms of the analysis of structural imbalances and the strengthening of incentives for sound fiscal policies during good economic times. the clarity and enforceability of the fiscal framework should be enhanced. let me, as an aside, note that austria successfully managed to implement its fiscal consolidation as planned over the past four years. the austrian example shows that structural cuts in fiscal deficits need not entail below - average macroeconomic growth. as recent research by the european commission shows, fiscal consolidation through cuts in expenditures is less likely to entail short - run growth - dampening effects than consolidation which relies on raising taxes. while recent tax cuts by a number of european governments, including that of austria, are in principle appropriate given high public expenditure - to - gdp ratios, governments should use the coming economic upswing to bring their budgets into balance mainly through cuts in expenditures. there is a general consensus that the euro area urgently requires further structural reforms in financial, product and labor markets. the lisbon strategy provides the appropriate blueprint for progress. i think we can very much compare the current situation of the lisbon agenda with the state of emu in the mid - 1990s. • then as now a project of historical dimensions and of the highest priority for the eu ’ s further economic development was at stake. • then as now there was a lot of scepticism about the project ’ s viability and timetable. • then as now there appeared to be lackluster support from some european leaders. the decisive move that brought emu back on track in the mid - 1990s was the meeting of the euroepan council in madrid in december 1995. at that meeting, the date for the introduction of the european currency, january 1, 1999, the further steps necessary to reach this goal and the name “ euro ” were decided. this important guidance from european leadership established a “ pioneering mood. ” it triggered the necessary work at the various technical levels dealing with the preparation of emu. and, most importantly, it created confidence in european leadership and problem - solving capacity in the general public. i therefore welcome that the forthcoming spring meeting of the european council is set to give renewed impetus to the lisbon agenda, speed up the pace of reforms and strengthen the effectiveness of the