If governments achieve balanced budgets or surpluses in normal periods of the cycle, they create a safety margin, sufficient to allow the operation of automatic stabilisers in the event of fluctuations in growth without risking excessive deficits. Moreover, sound government finances are important to strengthen the conditions for price stability and for the strong and sustainable growth necessary to support employment growth.
Structural policies are another key area where national flexibility is needed and a uniform approach would be fatal. Many of the important challenges which the euro area countries currently face can only be addressed through national policies. This concerns in particular the high and persistent level of unemployment, which is rightly a source of deep concern.