The Council and the Commission, when assessing the adjustment path toward the medium-term budgetary objective, shall take into account whether a higher adjustment effort is made in economic good times, whereas the effort might be more limited in economic bad times.

We are in a completely different situation, which is not an ordinary drop in economic activity; we are, I repeat, experiencing exceptional circumstances and that now is the time to act.

The objective is to gradually achieve a budgetary surplus in good times which creates the necessary room to accommodate economic downturns and thus contribute to the long-term sustainability of public finances.

This is a downturn which is affecting all the industrialised countries throughout the world simultaneously.

In this economic slow-down, Member States must prove that the Lisbon objectives, being sustainable growth, full employment and quality of jobs, were not simply prescribed for periods of boom, but must also remain applicable now.

2. Points out that the report singles out, among many, four factors: depressed business and consumer sentiment, resulting in weak consumer demand, economic cycle, currency turmoil and high long-term interest rates in 1994, as accounting for the disappointing growth performance in 1995 (i.e. 2.5 per cent); welcomes, in this respect, that the Commission has rightly recognized monetary policies and monetary turbulences as being responsible for the recent slowdown and negative effects on employment; urges, therefore, the monetary authorities to reduce their interest rates further to the extent possible;