More flexibility in labour markets and 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.