The third annual workshop of the ESCB Research Cluster 2 on "International Macroeconomics, Fiscal Policy, Labour Economics, Competitiveness and EMU Governance" was held at the Bundesbank. The research clusters bring together ESCB researchers to present their work within the ESCB research community, exchange ideas and foster open discussions. This year, the workshop addressed issues related to fiscal policy, productivity, labour markets and labour market reforms as well as trade.