The Lisbon Strategy in the Wider European Context The third Pre-accession Economic Programme(PEP) is under preparation, covering the period 2007-2009 11 . The PEP is a document prepared by each can­didate country with the objective to define the economic policies and reforms necessary for European Union accession. Its aim is also to develop the institutional and analytical capacity necessary to participate in multilateral surveillance procedures of the European Monetary Union(EMU). In this context, the PEP is seen by the government as a precursor of the Convergence Programmes and of the national reports on economic reforms, which member states have to submit on an annual basis. The current Croatian Pre-accession Economic Programme 2006-2008 showed that the Croatian economy has achieved a considerable degree of macroeconomic stability with low inflation. The PEP was the answer to the reform agenda developed within the European/Accession Partnership, focused on the most important economic issues, including macroeconomic development, public finances, structural reforms and other areas. According to it, the expected macroeconomic indicators for 2008 are the following: the GDP real growth is expected to rise by 4.3%(3.8% in 2004), GDP per capita reaching 8.342 euros, while inflation is expected to increase to 2.6%(as compared to 2.1% in 2004). The public debt is expected to decrease to 47.7% of GDP(51.3% in 2005), the budget deficit is expected to be reduced from 4.5% of GDP in 2004 to 2.9%(Government of the Republic of Croatia, 2005). It shows that the areas in which Croatia is facing difficulties are high budget deficit and increasing public debt. At the same time, it is extremely important to translate the existing macroeconomic stability into sustainable development of the real economy sector, by particularly accentuating faster progress in structural reforms, privatisation and restructuring. The result of this should be visible in a growing standard of living for Croatian citizens. However, the progress in this area is still slow meaning that there is a need for a more efficient economic reform programme and its proper implementation. Implementing Lisbon instruments The practical way of approaching the Lisbon Strategy goals is through participation in its implementing and coordinating mechanisms. In the economic sphere it means the coordination of economic policy, which in the EU is being implemented through the Integrated Guidelines for Growth and 11. The PEP 2007-09 is envisaged to be submitted to the Commission in December 2006. 23