Assessment and Recommendations I. Macroeconomic Developments and Policy Challenges -Recent Developments -The Short-Term Outlook -Risks and Policy Challenges II. Maintaining Sound Public Finances -Trends in Public Finances in Recent Decades -High Expenditures and Weak Controls -Enhancing Efficiency and Expenditure Control in the Future -Conclusions III. Structural Surveillance -Policies to Reduce Structural Unemployment -Increasing Labour Supply -Improving the Efficiency of Educational Policies -Tax Policies -Housing Policies -Competition and Regulation -Assessment and Scope for Further Action IV. Encouraging Environmentally Sustainable Growth -Introduction -Institutions -Policy Targets and Policy Issues -Conclusions Annex I. Changes in User Charging Annex II. Chronology of Main Economic Events