The euro - wages - employment

Claus Noé
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Claus Noé: Freelance journalist (regular contributor to Die Zeit)

Transfer: European Review of Labour and Research, 1998, vol. 4, issue 1, 36-47

Abstract: The arrival of the euro will do away with all possibilities of using exchange rate adjustments to accommodate excessively high or excessively low pay settlements. In a situation of mass unemployment and extremely slow price developments, there is a risk of excessively low wage settlements being reached in order to win markets to the detriment of Euro-partners. There is a threat of mercantilist races to devaluation and a deflatory spiral would destroy any successes achieved on the growth and employment front. Under a single monetary and coordinated fiscal policy (EU stability pact), there is also a need to seek to coordinate incomes policies. The participants must undertake to abide by a macro-economic criterion of wage determination. The productivity trends of the national economies, taken together with the European Central Bank's unavoidable inflation forecast, are useful macro-economic indicators. Such concertation, hitherto neglected in the Treaties, is a task for the labour market partners and the Community bodies.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:sae:treure:v:4:y:1998:i:1:p:36-47

DOI: 10.1177/102425899800400106

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