In the aftermath of the economic crisis, economic policy in Europe faces a twofold challenge. One is to get medium-term growth for the European economy back on track by fostering competitiveness, innovation and knowledge-based capacities, as was the goal of the original Lisbon agenda. The other challenge is to remove the strong monetary and fiscal stimulus from 2010 onwards and to start consolidating the public budget deficits that have ballooned in the crisis, without disrupting the recovery. The skill with which we meet these twin challenges will determine European prosperity for years to come.