COMMISSION FOCUSES ON MAINTAINING GROWTH.

In the medium term the BEPGs are pursuing a steady acceleration in the limited rate of growth, which is put at 2% and 2.5% by the European Central Bank (ECB) and 3% by the Commission. In this context, particular importance is attached to making substantial inroads into the present under-utilisation of human resources. Activation of the labour supply is a necessary but insufficient condition. It needs to be compounded by a substantial and lasting acceleration of productivity growth, says the Commission. This implies a further shift in the focus of economic policy towards well-functioning, competitive and integrated product and capital markets and towards entrepreneurship and innovation. Over the longer run the key challenge is to prepare for the impact of ageing populations.The Member States are urged to achieve, already in 2001, budgetary positions of close to balance or in surplus (see separate article, same Section). They are also asked to prepare Budgets for 2002 in keeping with the need to avoid pro-cyclical fiscal policies and to strengthen further, where necessary, budgetary positions beyond the minimum requirements of the Pact. Continued responsible wage behaviour is needed from the social partners. Nominal wage increases should be set consistent with price stability and job creation. This implies taking due account of the price stability objective of the ECB whilst ensuring that real wage increases do not exceed productivity growth. The Member States should fully implement the Internal Market (namely by cutting legislation transposition deficits to less than 1.5% by the EU Summit in the Spring of 2002). They should also reinforce competition, according to the aims set by the BEPGs for this year.Recommendations for each country.On top of the general recommendations, the BEPGs include precise targets for the Member States. Pedro Solbes says the this year's guidelines have a clearer focus on the Euro area and present targets that are "ambitious, monitorable and precise".Here is a summary of the aims assigned to each EU Member State: - Belgium: Take into account the still very high government debt ratio, and the need to prepare for future challenges resulting from the ageing population, budgetary consolidation remains a priority. Hence the need to contain firmly the annual increase in primary expenditure within the 1.5% limit. Any extra revenue should be used for debt reduction. There is also a need to prepare for the budgetary...