The Union’s internal and external environment is in a state of rapid change. Europe must adapt, develop and reform. Even more than in the past it must concentrate on what is essential and focus its attention on areas where it can provide real added value. Through its right of initiative the Commission has a crucial role to play in reshaping the policies of the Union. At the same time it must rethink its action and improve its administrative, coordination and control capabilities. In a bigger and more diversified Europe, its role as defender of the common interest will be even more decisive than in the past. To succeed in this, it must reorganise and modernise its structures.

The development of internal policies is a first priority. This should be done in four directions: setting the conditions for sustainable, employment-intensive growth, putting knowledge and technology to the forefront, modernizing employment systems and improving living conditions.

The objectives of cohesion are clearly stated in the Treaty. Economic and social cohesion will become even more important in an enlarged, and therefore more diversified Union. The cohesion effort is an investment in our own future. The question is how to adapt the Union’s instruments to the future and to the challenge of enlargement.

The 1992 reform of the Common Agricultural Policy has been highly successful. But the time has come to deepen the reform and to take further the movement towards world market prices coupled to direct income aids. Several reasons militate for such an approach : the risk of new market unbalances, the prospect of a new trade round, the aspiration towards a more environment-friendly and quality-oriented agriculture, and last but not least the prospect of enlargement. At the same time, there is a growing need for a fully fledged rural development policy.

In its external relations, the time has come for the Union to develop a fully operational foreign policy. The Amsterdam Treaty gives it more adequate instruments to develop the CFSP. The euro provides it with a unique opportunity to become one of the leading financial players. Enlargement will enhance its influence. There is a genuine call for Europe whose partnership and cooperation is sought after worldwide. The Union must respond positively, both because it has political and economic interests to defend and because it has a major contribution to bring to peace, democracy and the defence of human rights and values.