variables for other administrative purposes such as tax administration. i acknowledge the sizeable initial investment implied by such a system. this requires thinking big and establishing eu law to bring it to life. without these changes, however, i see little chance of keeping european statistics fit for purpose in the digital age. i also think that the existing data confidentiality framework in the eu needs to be urgently reviewed. the sharing of confidential data for statistical purpose within the escb / ess should be facilitated by creating a solid legal basis. while the exchange of confidential information for statistical purposes is already enabled under eu statistical law, the experience of the last decade shows that this is not enough in a number of member states. some legal initiatives will be required, possibly to replace some enabling clauses with mandatory ones. for instance, a single statistical business register would never be possible without such an enhanced data confidentiality framework. these infrastructure developments would create a world of opportunities. for example, given the importance of mnes and the associated measurement challenges, the centralised collection of data on, for instance, the top 500 mnes in the eu could be envisaged, as is already the case in the financial sector for the 120 significant and 4, 000 less significant banks within the framework of banking supervision. such data, which could be made accessible to the relevant statistical authorities in the eu, have the potential to eliminate information gaps and overlaps across countries and hence ensure a more complete and consistent cross - country recording of the activities of mnes. moreover, this offers the prospect of significantly improving timeliness. at the same time, i am convinced that such an approach would be a winwin situation for mnes in terms of the statistical reporting burden. instead of receiving questionnaires from 27 member states in 20 - plus languages, a coordinated approach across the eu could significantly reduce reporting burdens. in individual member states, like my own, the centralised approach to the biggest mnes is bundled in large case units, which are often responsible for all reporting obligations and serve as a one - stop contact point for mnes. such an idea could also be considered at the euro area or eu level to the benefit of reporters and statistical authorities. turning to data wishes, as outlined earlier, further sectoral detail is necessary for an adequate analysis of risk exposures and to account for the activities of purely internationally oriented entities. there are important ongoing initiatives in this direction, both at a global level and within the escb. with regard to the

import data account for goods and services. global value chain participation is measured as the share of gross exports that cross at least three borders. the latest observation for trade is 2018 and for global value chain participation is 2014. chart 2 euro area external assets and liabilities ( percentages of euro area gdp ) sources : ecb and eurostat. notes : the data refer to positions vis - a - vis extra - euro area counterparts. the latest observation is for 2018. measuring the real side of globalisation the increase in international trade has been accompanied by the rise of complex production chains involving firms specialising in different stages of production. the global production network includes both multinational enterprises ( mnes ) – large, profitable global firms – and also smaller and often highly specialised firms. by now, it is well recognised that mnes have complex organisational structures which frequently involve numerous legal entities, including special - purpose entities ( spes ). this complexity influences balance of payments ( b. o. p. ) statistics in various ways. the size of transactions related to mnes, which are often intra - firm, poses challenges to the interpretation of balance of payments and national accounts statistics. the impact in terms of the magnitude and volatility of statistical indicators is especially visible in financial centres and small, very open economies where global firms are large relative to the size of the domestic economy. however, these factors are also increasingly relevant in understanding the external statistics of the aggregate euro area and other large economies. in relation to measuring international trade, cross - border production arrangements, such as contract manufacturing, have considerable implications for concepts that are central to the b. o. p. and national accounts. such arrangements may involve foreign subsidiaries ( offshoring ) or an arms - length relationship with an unrelated company ( outsourcing ). the extent to which such production arrangements matter for the euro area trade balance can be seen by comparing data on trade in goods between the b. o. p and international trade statistics. this is possible because of an important methodological difference between the two datasets : b. o. p data are based on the concept of change in economic ownership, while trade statistics measure all goods crossing a border. in terms of the goods trade balance for the euro area, the gap between these two datasets has been growing over time, in particular since 2015 ( chart 3 ). [ 4 ] this divergence has been driven by euro area financial centres with a high presence of mnes. chart 3