Establishment of National Productivity Boards - Main contents

EN

Official Journal of the European Union

C 349/1

Potential growth in the euro area and in the Union as a whole has slowed down considerably since 2000. The downward trend in potential output growth is notably due to a steady decline in the contribution of total factor productivity. Since 2008, economic growth has been further weakened by a fall in investment. Looking forward, economic growth will ultimately depend on increasing productivity. Raising productivity is a multi-faceted challenge which requires a set of well-balanced policies aimed, in particular, at supporting innovation, increasing skills, reducing rigidities in the labour and product markets, as well as allowing a better allocation of resources. While there is a need to improve the productivity and competitiveness performance within the Union, the recent crisis showed that Member States whose currency is the euro (‘euro area Member States’) can be particularly subject to the possible build-up and sudden unwinding of macroeconomic imbalances that may spill-over into other euro area Member States and non-euro area Member States. In the absence of flexible nominal exchange rates, they need adequate adjustment mechanisms to country-specific shocks. Productivity and competitiveness dynamics are of relevance both for the accumulation and correction of macroeconomic imbalances (for example trade and current account deficits, stocks of domestic and external liabilities) and for the effective adjustment to asymmetric shocks. Research and analysis of policies having a bearing on productivity and competitiveness dynamics should provide a basis for developments compatible with the objective of a smooth functioning of the economic and monetary union.

While this Recommendation is addressed to the euro area Member States, non-euro area Member States are encouraged to identify or set up similar bodies. Non-euro area Member States declaring their intention to follow up on this Recommendation should be allowed to participate on equal terms in all aspects of the cooperation related to the productivity boards.

The European Semester, in particular the Macroeconomic Imbalance Procedure as established in Regulation (EU) No 1176/2011 of the European Parliament and of the Council (1) and Regulation (EU) No 1174/2011 of the European Parliament and of the Council (2), provides a framework for integrated economic policy coordination and surveillance. In view of fostering progress with structural reforms, these existing mechanisms should benefit from strong national ownership. For this purpose, ensuring independent analysis at the national level and reinforcing the policy dialogue in Member States appears warranted.

The setting up of national productivity boards that track developments and inform the national debate in the field of productivity and competitiveness should contribute to the enhancement of ownership of the necessary policies and reforms at national level and to improving the knowledge basis for Union economic policy coordination. These boards should analyse productivity and competitiveness developments including relative to global competitors, taking into account national specificities and established practices.

The scope of diagnosis and analysis by productivity boards spans a comprehensive notion of productivity and competitiveness. They should take into account the long-term drivers and enablers of...