3. Welcomes the fact that euro-area members have made a concerted effort to correct excessive budget deficits in accordance with the reformed stability and growth pact; highlights the fact that the Commission considers that in the euro area as a whole, the quality of the adjustment has increased, with less reliance on one-off measures and a decrease in public expenditure; stresses, in particular, that the combination of consolidation efforts, notably in countries with excessive deficits, and improved economic developments have reduced the budget deficit of the euro area to 1,6 % of GDP in 2006, down from 2,5 % of GDP in 2005;

Those that took advantage of the good times to achieve more sustainable public finance positions and improve their competitive positions have more room for manoeuvre now.

- constant improvement in the macroeconomic situation.

We all know, partly from comparison with other countries, that if the situation remains as bad as this, if there is no prospect of an improvement in the economic situation, this will have a very negative impact on the chances of improving the functioning of democracy.

Since the mid-90s, the combination of improving economic conditions in Europe, the control of government deficits as a result of EMU, rapidly raising stock market valuations, the positive influence of the thriving US economy, and the abundance of investment opportunities in new promising technologies and applications, pushed the risk capital markets into exponential growth.

In the review and evaluation of the European employment strategy, it was concluded that during the five years of the implementation of the strategy, structural improvements in the EU labour market have matured and that the improvements in job creation cannot be solely attributed to the business cycle.