Notes that fiscal and monetary policies are no substitute for structural reform, which must address the underlying weaknesses of the European economy – sharply growing debts and deficits, an ageing population, the probability of a surge in inflation or a process of deflation, the highly probable new surge in inflation, risks to industries generated by climate-change policies, especially owing to uncertainty about new targets and standards, low productivity and lack of competitiveness; calls for higher efficiency in using public money, at both European and national levels; considers that the differences in the timing and intensity of the crisis, as well as the different ex-ante fiscal and monetary positions ...[+++]of the individual Member States, should be taken into account when adopting coordinated policies and targets; believes that these efforts should lead to faster real convergence among national economies;

178. Notes that fiscal and monetary policies are no substitute for structural reform, which must address the underlying weaknesses of the European economy – sharply growing debts and deficits, an ageing population, the probability of a surge in inflation or a process of deflation, the highly probable new surge in inflation, risks to industries generated by climate-change policies, especially owing to uncertainty about new targets and standards, low productivity and lack of competitiveness; calls for higher efficiency in using public money, at both European and national levels; considers that the differences in the timing and intensity of the crisis, as well as the different ex-ante fiscal and monetary positions ...[+++] of the individual Member States, should be taken into account when adopting coordinated policies and targets; believes that these efforts should lead to faster real convergence among national economies;

With little room to use monetary tools to deal with weaknesses in the banking sector, reliance on national fiscal resources in managing bank failures continues to link banks and sovereigns in a negative feedback loop.

Institutional weaknesses and deficiencies in the rule of law still hamper the smooth functioning of the market economy and affect the business climate.

Perhaps the one good thing that could come out of President Bush's unilateral introduction of tariffs on steel imports would be a much-needed serious debate about the flaws and weaknesses inherent in the free-trade model, because there is growing opposition to the global inequality inherent in its diktat that every country must put international competitiveness above all other domestic concerns.

The result is that, as regards audit, the Commission will continue to concentrate on evaluating management and control systems and on the procedural and management weaknesses identified by risk analysis, without giving up its right to inspect individual operations where necessary, for example when a Member State fails to follow up an irregularity.