ECONOMIC POLICY: DISAPPOINTING ASSESSMENT OF BEPGS.

The report stresses that the steps taken to overhaul the labour market have proceeded at a snail's pace. The way they were adopted was lacking in energy and an overall approach. The full implementation of Internal Market decisions is continuing to throw up problems and the barriers to trade and cross-border activities in the services industry are being removed at a sluggish pace.

The Commission agrees that national regulatory and competition authorities have been strengthened and state aid has been reduced. The liberalisation of network industries is continuing but there is still not enough competition in this sector.

The Communication assesses how the measures recommended last year have been put into practice in each Member State. The Recommendations are reported to be most effectively applied in Denmark and Sweden. These are closely followed by Belgium, Greece, Spain, Ireland, the Netherlands, Portugal and the United Kingdom. The final group comprises Germany, France, Italy, Luxembourg, Austria and Finland.

The main findings of the national assessment are as follows:

- Belgium: progress has been made towards keeping the budget balanced. The downward trend with the debt situation is regarded as welcome but the measures adopted last year are seen as insufficient to guarantee the long-term viability of government spending owing the ageing of the population. More far-reaching measures are required to avoid people being retired early. The steps taken to promote geographical mobility are described as inadequate. The same applies to the measures worked out to address the anti-competitive practices created by the lack of transparency owing to local authorities' involvement in certain service industries.

- Denmark has more effectively complied with last year's recommendations. The report hails the labour and service market measures. The electricity and gas markets will not actually be opened up until 2003 and 2004, respectively, but a decision has been taken to alter the support system for electricity produced from renewable sources or energy so as to allow greater competition in this sector.

- Germany has not succeeded in keeping its government deficit below the 3% of GDP limit in 2002. Uncertainties are continuing about budgetary consolidation this year. The same applies to curbing rising expenditure in the health care sector. Not enough progress has been made in reforming the job market. Insufficient, too, are the steps taken to overhaul the...