before the crisis largely explain why it emerged relatively unscathed from the great recession. exports recovered swiftly and currently stand at an all - time high, roughly equalling half of the country ’ s gdp. exports recovered particularly strongly towards non euro area countries. as a result, the decline in the euro area share in total german exports accelerated. meanwhile, the domestic demand contribution to gdp continued on its downward path, in part on account of subdued wage growth together with a tight fiscal policy ( see figure 12 ). 7 / 17 bis central bankers'speeches 8 / 17 bis central bankers'speeches 9 / 17 bis central bankers'speeches 10 / 17 bis central bankers'speeches in contrast to germany, france entered monetary union in much better shape. growth in the initial years was strong and unemployment declined by more than a fourth within five years. 10 wage increases remained moderate, even below euro area averages ( see chart 7 ), and unit labour costs moved according to the “ golden wage rule ”, i. e. at an average annual rate below, but close to, 2 %. however, with german unit labour costs remaining virtually unchanged over the period, a significant competitiveness gap built up. this was further aggravated by the crisis, during which french wages remained relatively sticky, in spite of the sharp fall in productivity. 11the consequences were especially detrimental for the french export sector, which suffered significant losses in market share ( see figure 9 ), despite the substantial squeeze in profit margins ( see figure 10 ). at the same time, the contribution of domestic demand to growth became increasingly important, supported by fiscal policy ( see figure 11 ) and sticky wage developments. 11 / 17 bis central bankers'speeches 12 / 17 bis central bankers'speeches as a result, there is now a striking divergence between france and germany on a number of macroeconomic dimensions : in germany, the domestic demand to gdp ratio is now among the lowest across advanced economies, whereas in france, it is among the highest. the opposite is true for exports ( see charts 13 and 14 ). 13 / 17 bis central bankers'speeches 14 / 17 bis central bankers'speeches the recent economic policy orientations and plans set out by the german and french authorities are steps in the right direction. in particular, the labour market reforms that have already been implemented by the french authorities, and those that are still planned, could yield sizeable growth benefits and improve competitiveness. these recent developments show that crosscountry interdependencies

##agate through the eu, should no longer be decided in isolation. at the european level, the european semester process for the coordination of economic policies – including the macroeconomic imbalance procedure – which was introduced by the eu in 2011, can play a key role. 14 however, it should be used to its full potential. equally important, though, is for national debates and decision - making processes to more fully internalise what it means to be part of monetary union. precisely for this purpose, the five presidents ’ report of 12 february 2015 15 called for the set - up of national competitiveness authorities. 16 these bodies are intended to foster national responsibility for identifying any necessary reforms and facilitating their implementation. subsequently, the council of the european union adopted on 19 september 2016 a recommendation for the establishment of national productivity boards17 and member states were invited to implement the recommendation by 20 march 2018. we should make full use of this recommendation. national productivity boards have the potential to become an important catalyst in supporting the sound functioning of national adjustment mechanisms. 1 i would like to thank isabel vansteenkiste for her support in preparing this speech. 2 the “ two - pack ” and “ six - pack ” legislative packages, which bundle together 6 regulations and 1 directive, aim to more closely coordinate economic policies through ( i ) a strengthening of budgetary surveillance under the stability and growth pact, ( ii ) the introduction of a new procedure in the area of macroeconomic imbalances, ( iii ) the establishment of a framework for dealing with countries experiencing difficulties with financial stability and ( iv ) the codification in legislation of integrated economic and budgetary surveillance in the form of the european semester ( see, for instance, eur - lex. europa. eu / legal - content / en / txt /? uri = celex % 3a52014dc0905 ). 3 see, for instance, ec. europa. eu / commission / news / reducing - risk - banking - union - 2018 - mar - 14 _ en 4 see a. estrada, j. f. jimeno and j. l. malo de molina ( 2009 ), the spanish economy in emu : the first ten years, banco de espana, documentos ocasionales, no. 0901 5 see a. sapir ( 2016 ), the eurozone needs less heterogeneity, voxeu, 12 february 2016 16 / 17 bis central bankers'speeches 6 see f. schra