A lowering of the tax burden is conducive to stimulating employment and growth, but it needs to be accompanied by corresponding restraint in public expenditure. Although 2001 will not see economic growth as high as in 2000 owing to the weakening of economic activity abroad, the medium-term prospects for the euro area remain good overall.
The euro area will be able to successfully meet the challenges ahead. The Treaty has laid down an appropriate framework for the allocation of tasks among policy areas. Monetary policy can best support economic growth over the medium term if it is strictly focused on its primary objective.