and copyrights. intellectual property products ( ipps ) have a high degree of cross - border fungibility and are of central importance not only for digital companies but also for other industries, such as pharmaceuticals. ipprelated transactions, which primarily reflect the operations of a small number of large companies, have had a marked effect on the services component of the euro area current account balance and were also visible – especially before the pandemic – in the euro area national accounts, where these appear as high imports of services and gross fixed capital formation ( charts 1 and 2 ). chart 1 euro area services trade balance ( eur billions ) source : ecb. notes : quarterly data. the latest observation is for the fourth quarter of 2020. chart 2 euro area national accounts : selected components ( quarter - on - quarter growth rates in percentages ) source : eurostat. notes : seasonally and working day adjusted quarterly data. the latest observation is for the fourth quarter of 2020. this highlights a dichotomy between the residency principle underpinning the macroeconomic statistical framework and the global footprint of mnes. data on the numerous entities belonging to mne groups in different countries are not consolidated in the accounts of the home country of the parent mne. instead, these are recorded in the national statistics of the economies where the entities reside, even if their role in domestic economic activity may be quite minor. this dichotomy also extends to the way statistics are collected and compiled : while companies are global, data are gathered nationally, refer only to the activities of mnes that are located in the country and are subject to strict data confidentiality rules. while european law enables cross - border data sharing for statistical purposes, this is often prevented or highly circumscribed by national rules. owing to the decentralised manner of data collection, the information sets for global companies that are available to national statisticians differ across countries, which limits cross - country comparability and overall data quality, including for the euro area. it also enables the emergence of large bilateral asymmetries in the measurement of the same variables, as observed, for example, between the euro area and the united states, but also within the european union ( chart 3 ). chart 3 bilateral euro area - us current account ( eur billions ; 2020 ) sources : ecb and us bureau of economic analysis. note : positive balance indicates a surplus for the euro area. turning to the financial side of global

. it is sometimes claimed that even the current eu fiscal rules do not work. however, evidence from recent years tells a different story. slide 3 – fiscal deficit in the eu countries, budget deficits have been reduced during the recent period when fiscal policy supported by the reformed rules has been effectively applied. this is not to say that the rules are perfect. perfect rules may not even exist. creating rules that ensure optimal countercyclical fiscal policies and fiscal sustainability is inherently difficult. still, i would argue that eu fiscal rules can work, do work – and they can and must also be further improved. in the future, the economic and monetary union can work smoothly only if the public finances of all member countries are credibly on a sustainable footing. a functional combination of fiscal policy rules and market discipline is necessary to achieve this. fiscal rules should be sufficiently well - designed and simple to ensure that, in normal circumstances, we can expect that they will be adhered to when budgets are prepared. rules that support sustainability have become commonplace since the 1990s. according to the imf, nearly 100 states apply national or supranational fiscal rules. fiscal rules have been linked with a more steady development of budget deficits. when fiscal rules operate correctly, they do indeed support the conduct of responsible fiscal policy, long - term sustainability of public finances, and the objective of keeping public debt financing costs low. the goal of the eu ’ s fiscal rules is to ensure the sustainability of public finances and, within that framework, to enable sufficient fiscal room for manoeuvre to stimulate the economy in a member state in recession. not enough attention was paid to the level of public debt before the financial crisis. during the ensuing recession, debt levels rose sharply due to stimulus measures and weak macroeconomic developments. in the most vulnerable countries, risk premiums rose sharply. this led to a negative spiral in which a number of countries ultimately had to tighten fiscal policy, even though economic conditions were difficult. this should be avoided in the future. the eu ’ s fiscal rules have last been revised relatively recently, in 2011. while the body of rules has produced results, it has become rather extensive and sometimes inconsistent. interpretation of the rules, with all the flexibility options, has become complex and difficult to predict. more simple fiscal rules would probably serve debt sustainability better, and also increase transparency and facilitate ex - post verification of policies. in the best case scenario, the predictability of fiscal policy and its credibility in