, wages have to reflect productivity to maintain price competitiveness. for example, the countries under full eu - imf programmes have seen their unit labour costs fall by more than 15 percentage points since 2009, relative to the euro area average. current accounts are in balance or surplus in all the countries under strain, meaning that they are no longer accumulating external debt and “ living beyond their means ” – and larger countries would be well advised to follow. and even though declines in import demand play an important role, the rebalancing in countries under strain is also coming from growth in exports and increasing market shares. in spain, for example, export volumes are up by more than 20 % since 2009. for this reason, i do not agree with those who say that europe is in a “ lost decade ”. euro area countries are using the second decade of the euro to undo the mistakes of the first – and in doing so, laying the foundations for sustainable growth in the decades to come. the challenge ahead the task of restoring sustainable growth is still far from complete. regaining competitiveness is only one part of the challenge. another essential component is to reverse the damage to the economy caused by the crisis. it has reduced the euro area ’ s output level and perhaps also its growth rate. to turn that around requires higher investment in human and physical capital – and in all euro area countries. in germany, for example, investment is still around 1 percentage point of gdp lower than it was in 2007, and in that year it already had the lowest investment ratio in the euro area. both the public and private sectors have a role to play here. generating higher investment is ultimately the job of the private sector. but public authorities have to create the conditions that facilitate and encourage this process. i see three conditions as crucial : a stable macroeconomic environment ; growth - enhancing structural reforms ; and a healthy banking sector. first, a stable macroeconomic environment provides the certainty that is so important for investment. that entails medium - term price stability, which the ecb is providing. and it entails mediumterm economic stability, which governments have to ensure through sustainable fiscal and economic policies and adhering to the euro area rules. second, structural reforms are vital to raise growth potential and make new investment attractive – especially in the current environment where firms may have become less optimistic as a result of the crisis. of particular importance are reforms that increase competition, which in turn drives innovation, efficiency and productivity growth. such

fallen to just 71 % of that of the united states. over this same period of time, canada also fell behind our g7 peers, with only italy seeing a larger decline in productivity relative to the united states. improving productivity in canada needs to be a priority for everyone, and there are two basic strategies for doing it. one is to have the economy focus more on the industries that add greater value than less - productive activities. the other strategy is to keep doing the jobs we're doing but do them more efficiently. ideally, canada would use both strategies, leading to an economy with strong productivity growth and a large concentration of high - value industries. unfortunately, canada's recent record isn't very good on either front. that may seem strange. after all, canada is known for some high - value industries, such as energy and aerospace. but while the level of productivity here is high, the growth rates aren't necessarily strong. at the same time, some industries in canada have shown pretty good productivity growth over the past couple of decades. 1 but these include sectors such as retail and wholesale trade, which tend not to generate the same amount of output per worker as sectors like energy or aerospace. i want to be clear here. improving productivity doesn't mean shutting down whole sections of the economy and telling workers they have to go learn new sets of skills. it means paying attention to where the future high - value industries are coming from. we need to ensure that the right incentives are in place to allow companies in these industries to grow and thrive. and they need the right supports, such as access to markets and financing. i expect this resonates with you here in the room. history shows that advances in productivity often come from the start - ups, the new companies led by entrepreneurs with groundbreaking ideas. organizations such as the halifax partnership and other 3 / 6 bis - central bankers'speeches incubators are encouraging the companies that can lead us to the next great breakthrough in productivity. and you can see examples across the region, particularly in the clean tech, ocean tech and agritech sectors. how to improve i want to turn now to what we can do to improve canada's productivity. many studies have looked at this issue over the years, and there's still no consensus about the causes of canada's poor performance and where policy - makers should put their energies first. but we can't afford to wait for complete certainty. there is much we can