Christa Randzio-Plath Europe has financial room and labour resources for more investment and growth-oriented macroeconomic policies but was not able to design a more investment-oriented macroeconomic policy. The“stupid” Stability and Growth Pact, as referred to by Mr Prodi in one of his speeches, is now reformed; the lack of confidence due to unforeseen sluggish growth, and economic and employ­ment insecurity were seen as the heart of the problem. Europe's macroeconomic policy regime is responsible for its actual perfor­mance. Positive structural reforms are needed but they will only result in more jobs and growth if improvements on the supply side of the economy are being matched with similar developments on the side of aggregate demand. The big and buoyant single market is the indispensable basis for the business confidence that generates investment, growth and jobs. It is also a powerful advantage in international competition, envied by some of the EU's biggest trading competitors, such as the US, Japan, China and India. In current circum­stances, with the strong euro, the role of domestic demand is becoming even more crucial. There is a need to stimulate this demand by boosting investment. This relies on strong consumption, which depends in turn on the defence of the purchasing power of employees. Lisbon renewed The Lisbon Strategy has been renewed. Rightly the mid-term review has de­monstrated that the strategy had the right complex objectives. Results however were missing especially because of the low degree of implementation by member states and the lack of ownership and leadership needed. The Lisbon Agenda on sustainable growth, full employment and social inclusion wanted to increase the competitiveness of Europe. Competitiveness is a key to creating and securing jobs and to sustaining the European social model. As the strategy has not improved European economic performance and the EU has fallen even further in global competitiveness, it is necessary to unlock European potential and change the manner in which Europe is pursuing the Lisbon Strategy, to become more efficient, more coherent, more concentrated and more decentra­lised. In the last decade, the EU economy has grown well below its potential, with the result that millions of potential jobs have failed to be created. Both public and private investments have been inadequate to generate growth. From 4% of GDP in the early 1970s, gross public investment has fallen to 2.4% in the euro area, while private investment has also fallen. New challenges, such as the ageing of the population, the growing pressures on the natural environment and 42