. hosts some of the world ’ s best brains in its top universities. there is also evidence that, in spite of its small share in total production, the it - producing sector in the u. s. did contribute to a non - negligible extent to the post - 1995 increase in aggregate labour productivity growth, due to its double digit productivity growth rates. 2 on a more general note, there are other signs of a worse innovation performance of average eu countries compared to the u. s.. the european commission, under the lisbon strategy, has been monitoring the innovation performance of the eu member states, compared to other countries, for a number of years. innovation performance is summarised in a composite indicator, called summary innovation index, which includes inputs ranging from the structural conditions required for innovation and investment in r & d activities, to measures of results achieved in terms of successful know - how. the latest report does indicate danish, finnish, german and swedish firms as world innovation leaders, with both high and fast - growing scores in terms of the summary innovation index. 3 the performance of u. s. firms is slightly below the leaders and at par with other european countries including france and belgium. that being said, on average eu countries do lag behind both the u. s. and japan. and this is true also in terms of a number of other crucial indicators. 4 for example, japanese expenditure in r & d in 2004 was, in percent of gdp, twice as big as in the eu ; in 2003, the share of population with tertiary education was 38 percent in the u. s., compared to 23 percent in the eu and 30 percent in the scandinavian countries ; venture capital investments, again as percentage of gdp, were in the u. s. in 2002 more than three times larger than in europe in 2005 ; finally, both the u. s. and japan show a vastly superior performance in terms of number of patents granted compared to the eu. nevertheless, differences in the ict - producing sectors appear to be insufficient to explain the bulk of the cross - atlantic gap in aggregate productivity growth. there is a view, which i will turn to next, that ict - using sectors have also played a fundamental role in determining productivity improvements in the us. second remark : u. s. firms are better able to exploit new technology over the years from 1996 to 2004, the labour productivity differential between the euro area and the u. s. has characterised above all the standard, non

, and under what conditions it could function well. fiscal policies in emu the role of fiscal policies in emu has been at the core of the policy debate for some time now. fiscal policies span a broad range of issues, ranging from public investment and collective see cœure, b., “ time for a new lamfalussy moment ”, speech at the professor lamfalussy commemorative conference, budapest, 1 february 2016. see cœure, b., “ towards a political convergence process in the euro area ”, speech at the interparliamentary conference “ towards a progressive europe ”, berlin, 16 october 2015. bis central bankers ’ speeches goods – allocative functions that would also include the eu budget – to tools for macroeconomic stabilisation. today, rather than discussing what, broadly speaking, fiscal policy could do to support growth at the current juncture, i will focus on how well - designed fiscal policies in an economic and monetary union – where monetary policy is exercised at the european level – could act as an instrument for stabilisation. let me start by clarifying that the euro area today is not at a crossroads between two starkly different routes, namely, responsible national fiscal policies on the one hand and a common fiscal capacity or a euro area budget on the other, with the choice between the routes being based on political or philosophical priors. from an economic standpoint, these are complementary. and in fact, we already have elements of both. first, a precondition for fiscal policies to be able to contribute effectively to macroeconomic stabilisation is to ensure that markets have faith in the sustainability of public finances. and that is why adherence to, and the full and consistent implementation of, the stability and growth pact and fiscal compact is so important. as i have said before, this is not a matter of theology ; it is a political and economic imperative. markets need to trust the capability of our governance framework to effectively coordinate fiscal policies in emu, and citizens need to be confident that common rules are being respected. let me add that any common fiscal capacity will be financed by current or future taxes on the same taxpayers and companies which already fund their national budgets. we cannot add to this edifice if its foundations are shaky, that is, if national budgets are not clearly sustainable. in concrete terms, this means that member states should rebuild fiscal buffers into their national budgets to be able to weather future economic shocks, while at