Published on July 12, 2016
1. Getting institutions right for productivity enhancing policies: a French view in a European context OECD Productivity forum Fabrice Lenglart France Stratégie, deputy commissioner 1 Titre de la présentation
2. 2 Outline European coordination on productivity-enhancing reforms National productivity-enhancing institutions: the case of France Linking the two : National Competitiveness Councils
3. 3 A European framework Coordination in Europe before the crisis Fiscal policy: SGP Productivity policy: Lisbon strategy and CSR Competitiveness performances: overlooked => Led to divergences at the origine of major macro-imbalances Since the crisis Fiscal policy: deepened and strenghtened SGP Productivity policy: MIP + European Semester (reinforced CSR) Competitiveness policy: MIP + reinforced CSR but no analysis of intra EZ relative competitiveness
4. 4 A European framework Total Factor Productivity Source: OECD
5. 5 A European framework Real unit labor cost Source: AMECO
6. 6 Main limits and problems Limits: Top-down approach Lack of granularity for the diagnosis Lack of national ownership Weak influence on national stakeholders Why is it a problem? Pro-growth policies much needed in Europe – poor track record Current account and competitiveness divergences not sustainable Uncoordinated structural reforms, if leading to deflationary pressures, may create difficulties in a monetary union in the current context
7. 7 National productivity-enhancing institutions: the case of France Several institutions in charge of productivity diagnosis and recommandations but alongside other objectives: French Treasury Business Directorate (DGE) France Stratégie (former French Central Planning Bureau « Commissariat Général au Plan ») CAE – Council of Economic Advisers CEPII (Main French International Economy Centre) Industry National Council Commissariat-General for Investment Numerous ad-hoc reports on productivity and competitiveness
8. 8 Productivity-enhancing policies: renewed focus in France 2013 Shared diagnosis leading to ambitious and consistent policies Gallois report CICE: job and competitiveness tax rebate 20Bn€ (1% GDP) Responsibility Pact: additional 20Bn€ (1% GDP) Strenghtening evaluation Ex-ante evaluation: Macron Law Ex-post evaluation: CICE Innovation policy evaluation Main limitations: No single institution with a clear mandate on productivity and competitiveness Lack of a common European assessment
9. 9 Creating National Productivity Boards across the EZ and the EU Increase national awareness and ownership on issues related to productivity and competitiveness Foster consistency of competitiveness analysis among EZ members Monitor wage-price developments and avoid the build-up of new competitiveness divergence Support bottom-up cooperation and shared analysis on cost and non-cost competitiveness issues
10. Institutions: What should NPB look like? Nature Bridges between aggregate and granular levels / between overall objectives and individual decisions Fora for dialogue on competitiveness record, determinants and desirable directions Tools Collect data, create smart and comparable indicators at the aggregate and sectoral level, present this information in a user-friendly way Annual report with recommendations to government and social partners Institutional arrangements Depend on national characteristics (degree of wage-setting centralisation, relationship between government and social partners) Independent experts body with a permanent secretariat to build and maintain statistical toolbox Work in close consultation with social partners Reports by body of independent experts 10
11. Critics and answers No need to interfere with market-based process? => Experience suggests need to monitor competitiveness Wage negotiation is the social partners’ business => NPB will only inform the debate It will be another European interference into a sovereign issue => more decentralized / bottom-up than present MIP It will add another layer of complexity into European coordination => Light coordination process 11
12. Thank you 12
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