A European Council meeting took place under the UK Presidency in Cardiff in June 1998, at which the Heads of State or Government of the Member States stressed the importance of sustained and durable growth in promoting job creation. To make the most of growth, they decided to put in place an improved macroeconomic dialogue on economic reforms, with a view to unleashing a more dynamic economic performance.
Two reports were prepared: Cardiff I, on the functioning of product and capital markets, and Cardiff II, which drew on Member States’ progress reports and their National Action Plans (NAPs) on employment. The Cardiff II report emphasises the need for structural reform in fostering growth and employment and the need to consider the interaction between the various aspects of structural reform and macroeconomic policies. The Member States were urged to achieve coherence between reforms of different markets on the one hand and between reforms in labour markets and public finances on the other. The ongoing pursuit of this agenda is known as the Cardiff process.