How we achieve gains in productivity is complex since the factors that drive long-term productivity growth are complementary to each other. For example, new investments in capital goods and enhancement to labour skills are often required to take advantage of productivity enhancing new technologies. I wish to suggest that productivity is as important in the public sector as it is in the private sector.
The general answer is that it is too early to judge the implications of the recent reform of the SGP for the sustainability of public finances and for the stabilisation role of fiscal policy in Europe. Ultimately, it is the implementation of the revised rules that will provide the definite answer.