ECONOMIC POLICY: COMMISSION REAFFIRMS BROAD ECONOMIC POLICY GUIDELINES.

The Commission notes, with regard to the current Member States, that no major policy adjustments justify modifying the general guidelines. In fact, the economic context is considered to be improving in terms of growth, inflation and, to a certain extent, employment. Thus, the Commission argues, the focus should be on maintaining sound budgetary policies and making real and rapid progress with the adoption of structural reform measures to make up for delays. As the European Commissioner for Economic Affairs, Pedro Solbes, highlighted when presenting the document to the press, the general guidelines are not changing but they do now really need to be applied. He dwelled in particular on the budgetary policies of certain countries that were targeted in the separate Commission Communication on Spring economic forecasts (see separate article, in this Section). The BEPGs Recommendation itself does contain quite specific updates on budgetary recommendations for those countries, namely Germany, Greece, France, Italy, the Netherlands, Portugal and the United Kingdom.

Regarding the new Member States, Mr Solbes said that integrating them into the EUs economic policy framework through the BEPGs was "an important step. They have great potential for economic dynamism that will be stimulated by their effective economic integration and by the implementation of the Lisbon Agenda". Although the structural challenges that they face are not fundamentally different to those of the current Member States, they are, in some cases, more demanding. Indeed, the Commission notes that:

- unemployment in these countries is almost double that of the EU-15;

- the budget deficit amounts to some 6 per cent of GDP;

- the income level is less than half that of current...