labour market measures ” which provide programmes of education, training and work experience targeted at the long - term unemployed. third, reforms to the tax and benefit systems could be implemented which ensure that people are significantly better off in work than out of it. i should like to emphasise that the structural reform agenda available to national governments to promote economic development extends well beyond the reform of labour markets. for example, national governments can take steps to promote entrepreneurship and make it easier for people to start and run businesses and thus create new jobs. this could involve encouraging competition through measures to promote the entry of new firms, such as reducing the administrative burdens they face and making markets more competitive. governments can also liberalise previously highly regulated sectors, such as utilities, to increase efficiency and reduce prices to the benefit of industrial and household users of these services. national governments may also wish to take steps to raise productive investment in research and development to increase growth in expanding high - tech industries. experience in the netherlands shows that reform programmes indeed have the potential to substantially improve the labour market situation. the decline in the unemployment rate from its historical peak at 11. 6 % in 1983 to today ’ s 3. 2 % is indeed impressive. however, even in the netherlands there is little reason to become complacent. thus, there seems to be a need to step up efforts to reduce inactivity and improve the flexibility of the labour market in order to help ensure responsible wage developments and price stability. it would also seem that the netherlands has not, as yet, been successful in increasing output growth. a “ polder model ” yes, a “ new economy ”, no, not yet. 4. conclusions to conclude, i am convinced that economic and monetary union provides a great opportunity to create and maintain a large zone of price stability and economic prosperity in europe, including a substantial reduction of unemployment. however, while price stability is a necessary condition for fully grasping the opportunities of emu, it is not sufficient. stability - oriented polices regarding the development of national fiscal positions and structural changes to improve the functioning of markets are of crucial importance as well. policymakers in all areas must take the new environment of stage three of emu and its consequences appropriately into account when forming their policies. only then will the euro be able to function as a true accelerator of economic growth in europe. the introduction of the euro and a common monetary policy have certainly not rendered national governments impotent. with the possibility to vary fiscal policy

and undertake structural reforms, national governments retain the key powers to improve the performance of their economies. if the terms of the stability and growth pact are adhered to, there is sufficient flexibility to allow automatic stabilisers to work in the event of cyclical fluctuations. together with the social partners, governments have a key responsibility to act decisively to ease the unemployment problem in europe. structural reforms provide the only means of achieving lasting reductions in unemployment, preparing for the ageing of the population and reducing the burden of government debt.