Recommendation for a COUNCIL RECOMMENDATION On the establishment of National Competitiveness Boards within the Euro Area
Date: 2015-10-21
Institutions: European Commission, Secretariat-General
Subjects: EU office or agency, competitiveness, economic disparity, economic policy, economic recession, macroeconomics, participating country (euro area)

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   EUROPEAN COMMISSION  Brussels, 21.10.2015  COM(2015) 601 final   Recommendation for a COUNCIL RECOMMENDATION On the establishment of National Competitiveness Boards within the Euro Area  
 
 
Recommendation for a 

COUNCIL RECOMMENDATION 

On the establishment of National Competitiveness Boards within the Euro Area 

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)  While  there  is  a  need  to  improve  the  coordination  and  the  surveillance  of 
competitiveness  developments  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. In the absence of 
flexible  nominal  exchange  rates,  they  also  need  adequate  adjustment  mechanisms  to 
country-specific  shocks.  Competitiveness  dynamics  are  of  relevance  both  for  the 
accumulation  and  correction  of  macroeconomic  imbalances  (e.g.,  trade  and  current 
account  deficits,  stocks  of  domestic  and  external  liabilities)  and  an  effective 
adjustment  to  asymmetric  shocks.  Competitiveness  deterioration  may  also  be 
responsible for reduced potential growth, which makes high debt less easy to be paid 
back.  Coordination  of  policies  having  a  bearing  on  competitiveness  dynamics  would 
help to ensure that competitiveness developments are compatible with the objective of 
a  smooth  functioning  of  the  economic  and  monetary  union  (EMU).  While  this 
Recommendation  is  addressed  to  the  euro  area  Member  States,  the  other  Member 
States are also encouraged to set up similar bodies.  

(2) 

(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  the  need  to  foster  progress  with  structural  reforms  in  the  competitiveness 
domain, these existing mechanisms need to be backed by stronger national ownership 
of  reform  agendas.  To  this  purpose,  raising  independent  policy  expertise  at  national 
level and reinforcing the policy dialogue between the Union and the euro area Member 
States appear warranted.  

The setting up of national  competitiveness boards in  charge of tracking performance 
and  policies  in  the  field  of  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  in  the  field  of 
competitiveness.  These  boards  should  assess  competitiveness  developments  and 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

policies, but also provide policy advice for reform implementation, taking into account 
national specificities and established practices. 

The  scope  of  intervention  of  competitiveness  boards  should  span  a  comprehensive 
notion  of  competitiveness.  Wage  dynamics  as  well  as  non-wage  factors  and 
productivity drivers and dynamic considerations related to investment, innovation and 
the  attractiveness  of  the  economy  to  businesses  should  fall  under  the  remit  of  these 
boards. 

Competitiveness  boards  should  be  entrusted  with  the  capacity  to  ensure  high-quality 
economic analysis as the basis for their advisory role. 

Competitiveness  boards  should  be  independent  from  the  ministries  or  public 
authorities  that  deal  with  competitiveness-related  issues.  The  competitiveness  boards 
should also 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  advisory  role  of  competitiveness  boards  adequately 
reflects expert judgement formulated in the general interest. 

The characteristics of the competitiveness boards should be in compliance with Article 
152 of the Treaty and should take into account 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. 

The Commission should coordinate the activities of the competitiveness boards with a 
view  to  fostering  the  achievement  of  euro-area-wide  objectives  and  taking  into 
account inputs from the system of competitiveness boards in Union economic policy 
coordination. 

Competitiveness  boards  should  compile  and  publish  their  analysis  and  advice  in  an 
annual  report.  In  order  to  ensure  that  euro-area  and  Union  objectives  are  taken  into 
account  in  the  work  of  the  boards  consultations  between  the  Commission  and  the 
boards  should  take  place  for  the  production  of  these  reports  and  during  fact-finding 
missions  to  Member  States.  The  reports  will  inform  the  Commission  analysis 
undertaken  in  the  context  of  the  European  Semester  and  the  Macroeconomic 
Imbalances Procedure.  

(10) 

In order to ease coordination at supra-national level, there should be one identifiable 
competitiveness  board  in  each  Member  State.  However,  to  carry  out  their  activities 
properly,  competitiveness  boards  could  in  turn  rely  on  different  separate  existing 
bodies, provided that they meet the common principles exposed above. 

(11)  Monitoring  and  enforcement  of  the  Country-Specific  Recommendations  (CSRs) 
should remain at Union level, within the European Semester and 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. 

2. 

The objective of this Recommendation is the setting up of national competitiveness 
boards to monitor performance and policies in the field of competitiveness, thereby 
contributing to foster sustained economic convergence, and to increase ownership of 
the necessary reforms at the national level.  

This  Recommendation  is  addressed  to  the  euro  area  Member  States.  The  other 
Member States are also encouraged to set up similar bodies.  

3. 

Each Member State should have in place a competitiveness board tasked with: 

II. Establishing competitiveness boards 

(a)  Monitoring  competitiveness  developments  in  the  Member  State  concerned, 
taking into account factors that can affect prices and quality content of goods 
and services relative to global competitors in the short term (including labour 
costs)  as  well  as  longer-term  drivers  such  as  productivity  and  innovation 
capacity,  which  are  relevant  not  only  for  the  relative  performance  of  the 
economy  but  also  for  its  growth  potential  and  the  capacity  to  attract 
investment, businesses and human capital; 

(b) 

Informing  the  wage  setting  processes  at  national  level  by  providing  relevant 
information; 

(c)  Monitoring policies linked to competitiveness in the Member State concerned, 

including contributing to ex-post evaluation of policies; and 

(d) 

Assessing  policy  challenges  and  formulating  policy  advise  in  the  field  of 
competitiveness.  The  advice  of  competitiveness  boards  should  take  into 
account the broader euro-area and Union dimension. The boards should, inter-
alia,  provide  advice  on 
the  Country-Specific 
Recommendations addressed to the concerned Member State by the Council in 
the context of the European Semester; 

implementation  of 

the 

4. 

5. 

Each Member State should identify one competitiveness board, which could in turn 
rely on different existing bodies. 

Competitiveness boards should carry out their activities on a continuous basis. They 
should publish their analysis, and advice in an annual report. They should be engaged 
in contacts with the Commission and competitiveness boards of other Member States 
with the aim of coordinating views. 

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6. 

7. 

8. 

9. 

III. Characteristics of the competitiveness boards 

Competitiveness  boards  should  be  structurally  independent  or  endowed  with 
functional  autonomy  vis-à-vis  any  public  authority  dealing  with  competitiveness-
related  issues  of  the  Member  State  (in  particular  ministries,  administrations,  public 
institutes, public agencies). They should be underpinned by national legal provisions 
ensuring a high degree of functional autonomy and accountability, including: 

(a) 

a  statutory  regime  grounded  in  national  laws,  regulations  or  binding 
administrative provisions; 

(b)  not 

taking 

instructions 

from  any  public  authorities  dealing  with 

competitiveness-related issues or from any other public or private body; 

(c) 

 the capacity to communicate publicly in a timely manner; 

(d)  procedures  for  nominating  members  on  the  basis  of  their  experience  and 

competence ; 

(e) 

adequate  resources  and  appropriate  access  to  information  to  carry  out  their 
mandate. 

Competitiveness boards should consult relevant stakeholders (e.g. national actors or 
groups  of  actors,  including  social  partners,  who  participate  in  the  economic  and 
social dialogue of the Member States on a regular basis) but should not convey only 
or mainly the opinions and the interests of a particular group of stakeholders. 

Competitiveness 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. 

IV. Articulation with the European Semester 

The  Commission  should  facilitate  coordination  between  national  competitiveness 
boards  and  exchange  views  with  them,  in  particular  to  ensure  the  consideration  of 
euro-area and EU objectives in the work of the boards. Contacts should be envisaged 
ahead  of  the  production  of  their  annual  reports  and  during  fact-finding  missions  to 
Member States.  

10. 

The  independent  expertise  provided  by  those  boards,  including  through  the  annual 
reports,  will  be  used  to  inform  the  Member  States  and  Commission  analysis  in  the 
European Semester and the macroeconomic imbalance procedure.  

11. 

As a rule, the analyses produced by those boards should be made public. 

V. Accountability and transparency 

12. 

The  Member  States  are  invited  to  implement  the  principles  set  out  in  this 
Recommendation by [date of adoption of this recommendation + 6 months]. 

VI. Final provisions 

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13. 

By  [date  of  adoption  of  this  recommendation  +  12  months],  the  Commission  is 
invited  to  prepare  a  progress  report,  on  the  basis  of  relevant  information  from 
Member States,  on the implementation  and the suitability of this Recommendation, 
including whether the adoption of binding provisions appears necessary. 

Done at Brussels, 

For the Council 
The President 

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