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Monetary policy must exploit to the full every possibility for lowering rt-term interest rates, without jeopardising the fundamental aims of low inflation and low long-term interest rates. Monetary authorities will remain attentive to this, as conditions allow. In this respect, it is important that trade unions and employers clearly put the continuance of low inflation as one of the objectives of their negotiations. It is important also that governments contribute with improved fiscal policies.
7.
Public budget deficits typically pre-empt national savings; contribute to higher interest rates, thereby lowering productive investment; and redistribute incomes in ways that can seriously affect economic performance. Economic slowdown has increased public budget deficits. This is normal, and contributes automatically to supporting economic activity. But in most OECD countries this conjunctural deterioration superimposes itself on already large, structural deficits.
8.
Ministers commit their governments to:
a) reduce aggressively government budget structural deficits, wherever necessary, over the medium term. The automatic stabilisers will be allowed to play as full a role as possible;
b) improve the "quality" of budgets by enhancing their economic
efficiency, on both the expenditure and the revenue sides. Ministers consider it essential that public sector reform be actively pursued, that coherence of policies be enhanced, and that still better use be made of public money, in particular for investments
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