reforms aimed at enhancing labour force participation are needed to offset the low growth in the working age population. additional measures that are needed are the removal of barriers to investment and the creation of the institutional structures needed for a rapid and efficient adoption of new technologies. in this respect, the governing council considers that there is no clear indication yet that these structural factors have led to a measurable and lasting increase in productivity growth in the euro area. this notwithstanding, the uncertainties surrounding estimates of the medium - term development of potential output growth in the euro area have become skewed to the upside. this being the case the governing council will carefully monitor further evidence of an acceleration of productivity growth in the euro area. the ecb's monetary policy would naturally take such changes appropriately into account, if and when they occur. 2. issues relating to the introduction of euro banknotes and coins i should now like to report on several decisions that have been taken by the governing council of the ecb with regard to the euro cash changeover on 1 january 2002. given the crucial importance of this matter and the responsibility of the eurosystem as a whole to achieve a smooth cash changeover, the governing council has adopted an ecb guideline on the 2002 cash changeover. the aim of this guideline is to ensure that the framework of the changeover is consistently implemented, such as the provisions for frontloading and sub - frontloading and the financial modalities for credit institutions, as well as to provide a level playing - field for all credit institutions, their agents and sub - frontloaded entities. the ecb guideline can be viewed on the ecb's website and has also been published in the official journal of the european communities. moreover, the governing council considered measures which should help to ensure the availability of euro banknotes in non - euro area countries, so that customers demanding euro banknotes are able to obtain them in a timely and efficient manner. this is particularly relevant for countries in eastern and south - eastern europe. for example, a significant amount of deutsche mark - denominated banknotes are estimated to be held in these countries, and also some other euro area currencies are held outside their national borders. therefore, the governing council agreed on the following principles regarding the distribution of frontloaded euro banknotes outside the euro area : • credit institutions which are counterparties for monetary policy operations within the eurosystem will be allowed to distribute frontloaded euro banknotes to their branches, or

a recent, positive aspect has been that stressed euro area countries have taken significant steps in this regard. by reducing unit labour costs relative to euro area partners they have improved competitiveness and adjusted external imbalances. in 2013, all stressed countries – except cyprus – registered a surplus in their current account balances. cyprus is expected to run a surplus in 2014. compared to 2009, the current account ( and capital transfers ) balance has improved by about 16pp ( of gdp ) in greece, around 14pp in cyprus and portugal and between 10pp and 12pp in ireland, slovenia and spain. although weak bis central bankers ’ speeches domestic demand has contributed to declining current account surpluses, rebalancing has also been aided by strong export performance. unit labour cost developments during the crisis have helped. in the past five years, the cumulative unit labour cost differential vis - a - vis the euro area fell by more than 20pp in ireland, 16. 5pp in greece, 13. 5pp in spain, and 9pp in portugal. yet euro area - wide potential growth has also declined. falling capital accumulation and labour utilisation have brought potential growth from a level close to 2 % in the years preceding the crisis to less than 1 % on average between 2008 and 2012. 3 a recent study4 of the centre for european policy studies makes for sobering reading, suggesting that the prospective decline in the working age population ( averaging 0. 6 % per annum until 2030 ) would translate to an annual growth rate of about only 1 % to 1. 5 % until 2030. the long - term prospects of the euro area hinge, therefore, on generating a sizeable boosting of our productivity performance. dealing with low inflation the final issue i wish to discuss is the low inflation in the euro area. we have witnessed a pronounced, albeit gradual, fall in inflation in the past year, standing at 0. 7 % in april, up from 0. 5 % in march. euro area inflation is expected to remain low for a prolonged period of time. to judge the appropriate policy response, we need to understand the drivers of the low inflation outturns. a significant part of the fall can be explained by global factors. indeed, the majority of advanced economies have seen a decline in inflation since 2011 and in most advanced economies inflation is now below central bank price stability objectives. in this generalised fall, lower energy and food contributions have played an important role. in our case, the