Assessment and recommendations I. Recent developments and prospects -Overview -An improving economic climate -Buoyant foreign-trade activity -Inflation and the labour market -Short-term prospects and risks II. Fiscal and monetary policies -Monetary and exchange rate policies -Fiscal policy III. The Austrian tax system: adapting to new challenges -Introduction -Principal features and problems -Policy issues and the process of reform -Improving symmetry in the taxation of capital income -Assessment and agenda IV. Implementing structural reform: a review of progress -Introduction -Progress in structural reform -Overview and scope for further action Annexes -I. Technical notes -II. Chronology of main economic events Statistical annex and structural indicators