Council of the
European Union
Brussels, 13 June 2016
(OR. en)
10083/16
ECOFIN 590
UEM 248
NOTE
From:
General Secretariat of the Council
To:
Permanent Representatives Committee/Council
No. prev. doc.:
13348/15 ECOFIN 798 UEM 383
No. Cion doc.:
COM(2015) 601 final
Subject:
Recommendation for a COUNCIL RECOMMENDATION on the
establishment of National Productivity Boards
- Transmission to the European Council
Delegations will find here attached the post EFC version of the draft Council recommendation on
the establishment of National Productivity Boards.
The ECOFIN Council of 17 June 2016 is invited to transmit the recommendation to the European
Council in accordance with Article 121(2) of the Treaty on the Functioning of the European Union
(TFEU). The Council will proceed to the formal adoption of the text in the annex after the European
Council has discussed its conclusions on it, in accordance with Article 121(2) TFEU.
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COUNCIL RECOMMENDATION
On the establishment of National Productivity Boards
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article
292, in conjunction with Articles 121(2) and 136 thereof,
Having regard to the recommendation of the European Commission,
Whereas:
(1) Potential growth in the Euro Area and in the European 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 notably 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 made visible 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 other 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
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accumulation and correction of macroeconomic imbalances (e.g., 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.
(2)
While this recommendation is addressed to the euro area Member States, other Member
States are encouraged to identify or set up similar bodies. Other 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.
(3)
The European Semester, in particular the Macroeconomic Imbalance Procedure as
established in Regulation (EU) No 1176/2011 and Regulation (EU) No 1174/2011, 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.
(4)
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 levels 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.
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(5) 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 productivity and competitiveness, including innovation, and the capacity to
attract investment, businesses and human capital and address cost and non-cost factors that
can affect prices and quality content of goods and services, including relative to global
competitors in the short term.
(6)
Moreover, independent high-quality economic analysis of policy challenges increases
transparency in policy debates. Assessing policy challenges could raise awareness of all
stakeholders. This can have a positive impact on public support and ownership for necessary
reforms. Also, if and to the extent foreseen in their national mandate, the board could assess
the effects of policy options by making trade-offs of policy explicit.
(7) Productivity boards should be endowed with functional autonomy vis-à-vis any public
authority in charge of the design and implementation of policies in the field of productivity
and competitiveness in the Member State or at European level In particular, they should be
able to produce independent analysis within the scope of their area of work. The
composition of productivity boards, while subject to national discretion, should be unbiased,
in the sense that they should not convey only or mainly views of specific groups of
stakeholders. Such independence and unbiasedness requirements are aimed at ensuring that
the productivity boards are empowered to produce expert analyses formulated in the general
interest.
(8)
The characteristics of the productivity boards should fully observe Article 152 of the Treaty
and shall respect the national practice and institutions for wage formation. In accordance
with Article 28 of the Charter of Fundamental Rights of the European Union, their
functioning should not affect the right of workers and employers, or their respective
organisations, to negotiate and conclude collective agreements at the appropriate levels or to
take collective action in accordance with Union law and national laws and practices.
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(9)
Productivity boards should be engaged in contacts with productivity boards of other
participating Member States with the aim of exchanging views and best practices, also
taking into account the broader Euro area and Union dimension. The Commission could
facilitate the exchange of views between the productivity boards of all participating Member
States. There should also be a regular discussion between the productivity boards and the
Economic Policy Committee on issues within the latter's area of competence, involving
relevant experts in non-participating Member States.
(10) Productivity boards should carry out their activities on a countinuous basis. They should
make their analyses publicly available and publish an annual report, which could be
integrated into an already existing report. The independent expertise provided by those
boards, including through the annual reports, could be used by Member States and the
Commission in the context of the European Semester and the Macroeconomic Imbalance
Procedure.
(11) In order to ease exchange of views at supra-national level, there should be one identifiable
productivity board in each Member State. It is important to build on existing structures in
order to preserve what already works and to minimize administrative costs. Where
appropriate the productivity board could be based on an already established and respected
national structure including as regards the involvement and consultation of stakeholders.
However, to carry out their activities properly, productivity boards could in turn rely on
different separate and existing bodies, provided that their analysis is of the same high
quality.
(12) This recommendation does not alter the assigned responsibilities for the European Semester,
including designing and monitoring of the Country Specific Recommendations, or the
application of the Macroeconomic Imbalance Procedure as established in Regulation (EU)
No 1176/2011.
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HAS ADOPTED THIS RECOMMENDATION:
I. Objectives and scope
1.
The objective of this Recommendation is the setting up or identification of national
productivity boards to analyse developments and policies in the field of productivity and
competitiveness, thereby contributing to foster ownership and implementation of the
necessary reforms at the national level, and hence foster sustained economic growth and
convergence.
2.
This Recommendation is addressed to the euro area Member States. The other Member
States are also encouraged to set up or identify similar bodies.
3.
The application of this recommendation should fully observe Article 152 TFEU and shall
respect national practices and institutions for wage formation. This recommendation takes
into account Article 28 of the Charter of Fundamental Rights of the European Union, and
accordingly does not affect the right to negotiate, conclude or enforce collective agreements
or to take collective action in accordance with national law and practices.
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II. The productivity boards
4.
Each Member State should have in place a productivity board tasked with:
(a)
Diagnosis and analysis of productivity and competitiveness developments in the Member
State concerned. The analysis should take into account euro area and union aspects and
address the long-term drivers and enablers of productivty and competitiveness, including
innovation, and the capacity to attract investment, businesses and human capital and address
cost and non-cost factors that can affect prices and quality content of goods and services
including relative to global competitors in the short term. Analysis would be based on
transparent and comparable indicators; and
(b)
Independent analysis of policy challenges in the field of productivity and competitiveness,
and, if and to the extent foreseen in their national mandate, assessment of the effects of
policy options, making trade offs of policy explicit.
5.
Each Member State should identify one productivity board, which could in turn rely on, or
consist of different existing bodies.
6.
Productivity boards should carry out their activities on a continuous basis. They should
make their analyses publicly available and publish an annual report. They should be engaged
in contacts with productivity boards of other Member States with the aim of exchanging
views and best practices, and where appropriate produce joint analysis, also taking into
account the broader Euro Area and EU dimension. The Commission will on a regular basis
exchange views with all participating productivity boards, including during fact-finding
missions to Member States, and could faciliate the exchange of views between the
productivity boards.
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III. Characteristics of the productivity boards
7.
Productivity boards should be endowed with functional autonomy vis-à-vis any public
authority in charge of the design and implementation of policies in the field of productivity
and competitiveness in the Member State or at European level . To fullfill the tasks of this
present recommendation they should be underpinned by national provisions ensuring a
high degree of functional autonomy and accountability, including:
the capacity to communicate publicly in a timely manner;
procedures for nominating members on the basis of their experience and competence;
appropriate access to information to carry out their mandate.
8.
Productivity boards should be objective, neutral and fully independent regarding analysis
and content. They may consult relevant stakeholders, but should not convey only or mainly
the opinions and the interests of a particular group of stakeholders.
9.
Productivity boards should have the ability to carry out economic and statistical analyses
with a high degree of quality, including as recognised by the academic community. The
analysis could be produced by existing and separate bodies provided that it is of the same
high quality.
IV. Articulation with the European Semester
10.
The independent expertise provided by those boards, including through the annual reports,
could be used by Member States and the Commission in the context of the European
Semester and the Macroeconomic Imbalance Procedure. This recommendation does not
alter the assigned responsibilities for the European Semester, including designing and
monitoring of the Country Specific Recommendations, or the application of the
Macroeconomic Imbalances Procedure as established in Regulation (EU) No 1176/2011.
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V. Accountability and transparency
11.
As a rule, the analyses produced by those boards should be made public.
VI. Final provisions
12.
The Member States of the euro area are invited to implement the principles set out in this
Recommendation by no later than date of adoption of this recommendation + 18 months.
13.
By date of adoption of this recommendation + 30 months, the Commission is invited to
prepare a progress report, on the basis of relevant information from all Member States on
the implementation and the suitability of this Recommendation, including whether the
adoption of further provisions appears necessary. If warranted, the report shall be
accompanied by a proposal to adapt this Recommendation.
Done at Brussels,
For the Council
The President
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