"In recent years, EU Member States have initiated a process of structural reform which has improved Europe's performance with regard to the Lisbon targets. Europe has shown strong performance in some areas in recent years, e.g. in employment growth. However, the 2005 Mid-term Review of the Lisbon Strategy showed that Europe is still facing major challenges such as the creation of new jobs and improvement of welfare for its citizens. An ageing population and intensifying competition from abroad through globalisation is increasing the need for reform. Progress on economic reform and the conduct of stability and growth oriented policies are two mutually reinforcing and complementary elements in enabling the EU to meet the challenges it faces."

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