Nearly a year ago, the European Council in Lisbon set itself the goal of making Europe the most competitive, dynamic and inclusive knowledge-based economy in the world during this decade. Fine words: but have they been matched by action?

Certainly, a great deal of progress has been made. It is gratifying to see that in the past year, unemployment in Europe has fallen and the European economy looks set to grow at a steady pace over the next two years.

We have taken major steps forward in a number of areas like telecom liberalisation, a new legal framework for electronic commerce, redirection of funds to innovation and agreement on the European Company Statute and co-ordinated action to tackle social exclusion. We cannot, however, afford to be complacent.

Present economic strength must not be wasted to the benefit of our competitors but should be used to speed up much-needed reform. Growth gives us an opportunity to act - and we must seize the moment. We simply cannot hide behind the current favourable economic outlook and pretend that growth alone is sufficient.

If we don't take action now, Europe runs the risk of falling behind its main competitors in many areas that are crucial to our wellbeing and our children's future.

However, despite good progress in some areas since Lisbon, there have been some real disappointments in many others. A lack of political will has jeopardised some initiatives that all of us have considered essential. For example, we still have no agreement on a Community-wide patent and quite insufficient liberalisation of the gas and electricity markets.

The overall employment rate across Europe is far from the targets set at Lisbon. Not enough has been done to set corresponding targets at a national level. Take-up of the new e-economy is not fast enough. Making a reality of lifelong learning is now urgent.

The European Commission will be urging participants at the Stockholm summit to do all in their power to close the gap between rhetoric and reality, to deliver on past agreements and to live up to some new challenges.

Today my Commission will present member-states with 10 priorities for the coming year, all designed to help Europe realise its enormous potential. Our guiding principle is to create more and better jobs, move towards full employment, boost competitiveness and ensure that all parts of our society play their part in - and reap the benefits of - a revitalised economy.

I would like to highlight three areas in particular: the need to promote frontier technologies, create new European labour markets and integrate our financial markets. To increase prosperity and create more and better jobs, we need to put Europe in the lead in tomorrow's industries.

What we today call "frontier technologies" will be an everyday reality in the world where our children will work. During the coming decade, they will affect our lives just as deeply as the Internet has done during the last. The life sciences, materials technology and advances in computing have the potential to create jobs, growth and sustainable development.

To capture the potential of these pioneer sciences, we need to act now. Europe spends €75 billion less on research than the United States, and European scientists are held back by the duplication and fragmentation of their efforts. At Stockholm, the Commission will present proposals to boost Europe's research effort through greater co-ordination, mobility and benchmarking.

We will push for the legal protection necessary to spur enterprise in new fields like biotechnology and propose changes to free venture capital to fund research.

A high-tech Europe will only be possible if our workforce has the necessary skills and if those skills can be deployed exactly where they are needed. New European labour markets are emerging, in which it is increasingly common for people to take advantage of the single market to live and work in a different member-state.

The Commission is proposing a high-level skills and mobility task force to advise on how to expand this new phenomenon, so that as many citizens as possible can benefit. The Commission will present proposals to make Europe-wide recognition of professional qualifications more automatic and pensions more portable. Member-states need to agree proposals to modernise social security for migrant workers and to improve the information available on their rights and opportunities.

Matching skilled employees to young industries remains one of our greatest challenges. There must be no let-up in our efforts to boost, above all, skills in information technology, in schools and through lifelong learning. Alongside our efforts to boost skills mobility within the Union, we must be prepared to look outside, too.

To help us close our skills gaps, we need to consider a common approach to opening Europe's doors more widely to talented, IT-skilled people from beyond the Union's borders. The creation of the single market made an extraordinary contribution to European prosperity; we must make every effort to sweep away the remaining barriers to business activity.

In particular, we need faster progress towards a fully integrated European financial market. Europe is needlessly paying the price of non-integration, in lost opportunities for jobs and growth.

Differing national rules continue to make raising capital more difficult and expensive and reduce investor confidence, deterring cross-border investment. Getting the right regulatory environment for the financial markets is crucial too. It still takes far too long to get proposals from the drawing board to market or to adapt them once they are in place. It is my ambition to make Europe the easiest place in the world to do business.

My Commission plans to present a co-ordinated strategy to simplify the regulatory environment in Europe. There will be proposals too to free up rail freight and passenger markets and to make air travel more efficient.

As Europe takes its rightful place as a formidable global player, we must have zero tolerance for rigidities which stand between our citizens and a better economic future. Neither should we accept social divisions which set apart those who gain from the new economy and those who risk being left behind.

Within the framework agreed at the Nice summit, we are working hard to establish best practice and clear indicators for social inclusion. Our objective should be to make Europe's society, not just its economy, a model for the world.

In all this, the European Commission will do everything in its power to ensure that high ambitions are followed by action. Europe's citizens will judge us, as always, not on our promises but on what we deliver. I hope the same thought will be at the forefront of every participant's mind in Stockholm.