Council of the
European Union
Brussels, 13 September 2016
(OR. en)
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ECOFIN 614
UEM 254
LEGISLATIVE ACTS AND OTHER INSTRUMENTS
Subject:
COUNCIL RECOMMENDATION on the establishment of National
Productivity Boards
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COUNCIL RECOMMENDATION (EU) 2016/…
of…
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 Article 121(2) and Article 136 thereof,
Having regard to the recommendation of the European Commission,
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Whereas:
(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.
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(2)
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.
(3)
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.
1
Regulation (EU) No 1176/2011 of the European Parliament and of the Council of
16 November 2011 on the prevention and correction of macroeconomic imbalances
(OJ L 306, 23.11.2011, p. 25).
2
Regulation (EU) No 1174/2011 of the European Parliament and of the Council of
16 November 2011 on enforcement measures to correct excessive macroeconomic
imbalances in the euro area (OJ L 306, 23.11.2011, p. 8).
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(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 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.
(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 to 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
productivity boards could assess the effects of policy options by making trade-offs of
policy explicit.
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(7)
Productivity boards should have 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 of the Functioning of the European Union (TFEU) and should respect the national
practice and institutions for wage formation. In accordance with Article 28 of the Charter
of Fundamental Rights of the European Union, the functioning of the productivity boards
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.
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(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 minimise 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 formulating and monitoring the Country Specific Recommendations,
or the application of the Macroeconomic Imbalance Procedure as established in
Regulation (EU) No 1176/2011,
HAS ADOPTED THIS RECOMMENDATION:
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I.
Objectives and scope
1.
The objective of this Recommendation is the identification or setting up 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 non-euro area
Member States are also encouraged to identify or set up similar bodies.
3.
The application of this Recommendation should fully observe Article 152 TFEU and
should 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 laws
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 productivity and
competitiveness, including innovation, and the capacity to attract investment,
businesses and human capital, and to 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 should 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.
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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 non-euro area 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 Union 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.
III.
Characteristics of the productivity boards
7.
Productivity boards should have 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
Recommendation they should be underpinned by national provisions ensuring a high
degree of functional autonomy and accountability, including:
(a) the capacity to communicate publicly in a timely manner;
(b) procedures for nominating members on the basis of their experience and competence;
(c) appropriate access to information to carry out their mandate.
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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.
Relationship 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.
V.
Accountability and transparency
11.
As a rule, the analyses produced by those boards should be made public.
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VI.
Final provisions
12.
The Member States of the euro area are invited to implement the principles set out in this
Recommendation by … [18 months after the adoption of this recommendation].
13.
By… [30 months after the adoption of this Recommendation], 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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Document Outline