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 On 20 February the Commission adopted for transmission to
 the Council a Communication on the economic situation in the
 Community in which, in accordance with the 1974
 "convergence" Decision, it undertakes the traditional
 first-quarter examination of the economic policy guidelines
 contained in the latest Annual Economic Report (1).
 With the international economic environment proving somewhat
 more favourable than was expected as recently as the autumn,
 the Commission reckons that, as in 1984, real gross domestic
 product will grow by 2.4% in 1985. Inflation will decline
 further and the current account show a small surplus.
 Unemployment, however, is still at a worryingly high level
 and, taking the average for 1985, will rise slightly (from
 10.9% in 1984 to an estimated 11.2%) although there are some
 signs of improvement.
 Against this background, the Commission is adhering to the
 main goal of its economic policy strategy as approved by the
 Council and set out in the Annual Economic Report for 1984.
 These goals are:
 - to achieve a stronger expansion in productive potential
 and to make use of the extra scope that is available for
 growth provided this is compatible with the objective of
 price stability;
 - to ensure that economic growth is more conductive to job
 creation (more jobs per percentage point of growth than in
 the past) and to set unemployment on a clear downward
 All those responsible for economic policy (the Community,
 national governments, employers and unions) should
 contribute to and work closely together on this strategy.
 The key aspects are the following:
 - there should be an accelerated opening up and
 strengthening of the Community's internal market;
                             - 2 -
 - the main task of monetary policy is to ensure internal and
 external stability, providing a money supply that
 accomodates the desired rate of growth;
 - financial policy in the countries ith large budget
 deficits should remain on a consolidation course but any
 room for manoeuvre used to underpin growth;
 - the Community and the national governments should examine
 the possibility of doing more to meet the existing need
 for public infrastructure investment offering high
 economic returns;
 - continuing the policy of wage moderation, economic
 policymakers should agree on such decisions on income
 trends and employment conditions (including working time)
 as are consistent with the employment objective and
 reconcile economic efficiency and social criteria.
 The closer the cooperation between Member States'
 governments and the broader the consensus reached in the
 dialogue between the two sides of industry, the more
 successful this policy will be.

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