Eurozone growth reached 2.7% in 2006 – the highest since 2000 and well above the bloc's long-term average. At the same time, unemployment dropped to 7.5% – its lowest level in 15 years – and 2 million new jobs were created.
According to the Commission's second annual statement on the euro economy, published on 3 May, this positive performance "partly reflects the current cyclical upturn but it may also show that structural reforms are beginning to take effect".
The report calls on the 13 euro countries to make the most of this robust growth to continue reducing public deficits and debts, even further than required by the stability programmes, and to implement structural reforms, especially in their labour market and pension and health systems.
"Policymakers must strike while the iron is hot," said Economic and Financial Affairs Commissioner Joaquín Almunia.
In particular, Europe must find ways to raise its growth potential if it is to face up to the challenge posed by an ageing population. In the next half-century, there will be only two persons of working age for every senior citizen, meaning that, on current trends, growth would be limited to just 1% on average over the period 2031-2050.
Adapting tax structures and directing government expenditure towards education and R&D can contribute to increasing productivity growth and growth potential, states the report.
The report also urges euro countries to take the lead on international issues, in particular in order to tackle the problem of growing global current-account imbalances, which experts say could potentially lead to a crisis on financial markets that would produce world recession and disruptions to the global- trading system.
