QIR and EMU: A Proposal for Managing a Member States Departure from the European Monetary Union Submission

for the Wolfson Economics Prize Julian Le Grand London School of Economics

London School of Economics Houghton St London WC2A 2AE United Kingdom E-mail: j.legrand@lse.ac.uk Tel: +44 207 955 735 +44 7771 985 29

January 2012 1

BIOGRAPHY

Since 1993 Julian Le Grand has been Professor at the London School of Economics in the Department of Social Policy. He is an economist, with a Ph. D. in economics from the University of Pennsylvania (1972); he was a member of the economics departments of the University of Sussex (1971-78) and the LSE (1978-1987). From 1987-1993, he was Professor of Public Policy at the University of Bristol. He has acted as a senior policy adviser to the UK Prime Minister at No 10 Downing St (20032005); he has also advised HM Treasury, the European Commission, the World Bank, the World Health Organisation and the OECD. He has authored, co-authored or edited more than twenty books, and has published over 100 articles in leading economics, political science, philosophy and public policy journals.

QIR and EMU: SUMMARY

Applicants for the Wolfson Economics Prize must answer the question: If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership? Properly to address this question it is necessary first to identify the causes of the problem. Many analysts have pointed out that the fundamental difficulty facing the Eurozone is a misalignment of real exchange rates. Since the introduction of the euro, there has been a sharp loss of competitiveness for the weaker members of the zone, such as Greece, Ireland, Italy, Portugal and Spain, and a dramatic gain in competitiveness by, particularly, Germany. This has contributed to massive trade imbalances, and the consequent deficit financing problems that have characterised the current crisis. This problem of differential competitiveness cannot be resolved by most of the measures currently in place or about to be put in place. In particular, cutting government deficits, balanced budget rules and support for the banking system do not directly correct the underlying trade imbalances. However, the obvious alternative for the weaker countries to withdraw from the euro, to introduce a new currency and to devalue - is also deeply unattractive. Quite apart from the political and economic implications for the Eurozone as a whole of one or more countries leaving it, there are enormous economic and practical difficulties that face any country introducing a new currency. One way of overcoming at least some of these problems would be the following. At a given moment in time, a deficit country withdraws from the euro and denominates all its financial transactions in a temporary currency at a given exchange rate. It then immediately rejoins the euro but at a weaker exchange rate. Denote this QIR, for quit and instantly rejoin.

This form of QIR would be a devaluation with the same beneficial consequences for improving a countrys competitiveness, but without all the practical problems of associated with introducing a new currency. Especially in a world where many transactions are undertaken electronically, it would be relatively simple to implement, with all prices and wages still denominated in euros but marked down by the amount of the devaluation. It would be socially and politically more acceptable than austerity measures such as direct wage cuts, since it would leave households real incomes largely unaffected - except for those who spend large sums on imports or who have large foreign debts. Since the exit would be temporary - indeed almost instantaneous it should help overcome the legal difficulty that no eurozone country can officially leave it. The principal losers would be those who spend a large portion of their income on imports or who have debts to institutions outside the member state concerned; these are likely to be among the relatively well off, and thereby perhaps better placed to take some of the pain than those bearing the burden of the austerity measures already in place. There are even more powerful arguments for applying the basic idea of QIR (quitting and instantly rejoining the euro) to surplus countries. In this case, the country concerned would rejoin at a stronger rate. The obvious candidate for a revaluation QIR of this kind would be Germany. The country would benefit significantly, economically, socially and politically. German households would have higher living standards, due to their increased purchasing power over imports and for foreign travel Apart from a one-off price rise (matched by a parallel rise in money wages), the overall impact would be deflationary, which should appeal to German monetary sensibilities. And Germany would not have to pay to bail out the rest of the Eurozone.

The principal risks associated with either the devaluation or revaluation forms of QIR are the same as those associated with any devaluation/revaluation. They include the danger of destabilising capital movements and the associated difficulties for the banks, and that of debts (including sovereign debt) owed to institutions outside the relevant member state. The risk of capital flight from deficit countries is obviously real, although it is probable that most of the mobile capital has already left the

countries concerned.

However, it is a problem associated with any devaluation

involving a convertible currency; yet it has not stopped such devaluations in the past, nor limited their long-term effectiveness in restoring competitiveness. Moreover, it can be at least partly addressed by temporary capital controls. Given the long-term improvement in the trade and general economic prospects of the Eurozone following QIR, the foreign debt problem will be temporary, but, if acute, may be resolved by restructuring short-term debt into long-term debt. The answer therefore offered in this submission to the Wolfson question is that the future growth and prosperity of the current membership would be best served if member states that leave the European Monetary Union instantly rejoin it either at a stronger rate (surplus countries, such as Germany) or at a weaker rate (deficit countries, such as Greece). Of these two options, the one most likely to be successfully implemented and to succeed in creating growth and prosperity is the revaluation QIR for Germany. Neither of the QIR options will resolve all the difficulties facing the eurozone. To prevent the resurgence of competitiveness problems, QIR would need to be complemented by structural reforms within eurozone members, especially for the labour market within deficit countries. Government deficits would still need to be curbed in the long-term though, with the economic stimulus provided by QIR, this should prove much easier than now. Nor is QIR devoid of practical and political difficulties of implementation. But then so have all the alternative measures that have been proposed to defuse the crisis; and a respectable case can be made that QIR is in many ways the least worst. Moreover, it does have one cardinal merit, one that many, even most, of these alternatives lack: it addresses the central problem of competitiveness.

QIR and EMU: A Proposal for Managing a Member States Departure from the European Monetary Union **** INTRODUCTION Applicants for the Wolfson Economics Prize must answer the question: If member states leave the Economic and Monetary Union, what is the best way for the economic process to be managed to provide the soundest foundation for the future growth and prosperity of the current membership? This submission offers one possible answer, termed QIR: quit and instantly rejoin the euro. The submission begins with a summary of the principal problem facing the Eurozone. The next section considers some of the difficulties involved in resolving that problem through member states leaving the union and introducing a new currency. The fourth section discusses how these may be addressed by QIR. There is a brief concluding section. THE PROBLEM The problems facing the Eurozone have been ascribed to several different causes, including overspending by the governments of peripheral members of the Eurozone, the debt problems faced by banks and households throughout the zone, and the refusal of the European Central Bank to play a role as lender of last resort. However, most analysts agree that the principal problem concerns the differences in the trends for competitiveness of the members of the Eurozone. Among the first to point this out was Professor Charles Goodhart in an article in the Atlantic Economic Journal in 2007. More recently, in a letter to the Financial Times (23rd January 2012) headlined Fixing trade imbalances is the only way to avoid eurozone implosion Professor Marcello de Cecco, Professor Paul de Grauwe, Dr Andre Grjebine and Dr Franceso Saraceno of Scuola Normale Superioori di Pisa, the University of Leuven and Science Po respectively, argue that external imbalances led to high indebtedness, excessive borrowing and finally sudden stops in lending. The leading economics

commentator Martin Wolf agrees It is essential to restore competitiveness and economic growth. As Thomas Mayer of Deutsche Bank notes below the surface of the euro areas public debt and banking crisis lies a balance-of-payments crisis caused by a misalignment of internal real exchange rates. The crisis will be over if and only if weaker countries retain competitiveness. At present their structural external deficits are too large to be financed voluntarily (Wolf, 2011). A countrys competitiveness is usually measured by its relative unit labour costs. Goodhart (2007) demonstrated some time ago that there were significant differences in competitiveness within the Eurozone, and that this problem has developed further since then is demonstrated in Figures 1 and 2. Figure 1 shows trends in relative unit labour costs since 1999 (=100) for the principal problem countries, Greece, Italy, Ireland, Portugal and Spain, and also for France and Germany. Figure 1 Trends in unit labour costs relative to EU17: selected countries
%("# %'"# ;*59,3:# %&"# %%"# %""# $"# !"# ;5**0*# <=,.3# >5,30*# ?5*+,34# ?-,+:# @15-8A,+#

Source: Annex Table 1 From this, it is apparent that the competitiveness of all the problem countries, as measured by relative unit labour costs, worsened by more than 10% from 1999 to

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2010. French competitiveness also deteriorated but by somewhat less (around 5%). In contrast, Germany improved its competitiveness by nearly 20% between 1999 and 2008; since then it has been broadly stable.

Figure 2 Trends in unit labour costs relative to EU17: rest of Eurozone

%$"# %!"# %D"# %C"# %B"# %("# %'"# %&"# %%"# %""# $"# %$$$# &"""# &""%# &""&# &""'# &""(# &""B# &""D# &""$# &""C# &""!# &"%"# !"# ;*59,3:# E82-5.,# F*+A.89#,34#G8H*9785A# I:=582# J2-13.,# >.3+,34# K,+-,# L*-M*5+,342# <+1/,N.,# <+1/*3.,#

Figure 2 shows trends in relative unit labour costs for the rest of the Eurozone, again compared with Germany. All except for Austria show a fall in competitiveness over time, with Finland, Belgium and Luxembourg falling slightly (having been broadly stable over most of the period), Slovenia, Malta, the Netherlands and Cyprus showing a fall of around ten per cent, and with Estonia and Slovakia almost literally off the chart with increases of more than 40% and 80% respectively. Austria shows a slight gain in competitiveness of around 5%; but again it is Germany that stands out with a gain, to repeat, of nearly 20%.

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So only two countries in the Eurozone have increased their competitiveness since 1999, with the zones largest economy, Germany, in particular, showing a dramatic gain. All of the rest have seen a relative decline. A countrys competitiveness within a currency union may decline over time relative to others for a number of reasons, including external trade shocks and domestic wage inflation. (In fact the two may be linked, with external trade shocks leading to rises in import prices that contribute to domestic wage inflation and hence to a rise in unit labour costs). Wendy Carlin (2011) has argued that in the case of most member states in the Eurozone the principal problem was inflation persistence when the relevant countries joined the currency union. Specifically, inflation did not drop (or rise) immediately to the European Central Banks inflation target. For Ireland, this was exacerbated by the effects of the depreciation of the euro against the dollar and the pound, which contributed to some imported inflation. The opposite was the case in Germany, where wage restraint and productivity growth pushed the growth of unit labour costs and German inflation below 2%. In general, the impact of the rise in labour costs on general inflationary pressure may be partly offset by the fall in demand for exports. However, this in turn may be partly or wholly offset by a further destabilising factor: changes in the real interest rate. The rise in inflation will, in the absence of any action by the central bank, lead to a fall in real interest rates in the country concerned. This in turn will boost aggregate output, leading to further inflationary pressure. Carlin and Soskice (forthcoming) argue that something similar to this happened in Ireland and Spain in their property booms following their adoption of the euro. The rise in import prices, the consequent knockon effects of domestic inflation, and a low nominal interest rate set by the European Central Bank led to a significant fall in real interest rates in both countries. In fact real interest rates were negative in Ireland and Spain from euro entry to 2007. This fuelled a construction and consumption boom of extraordinary proportions. It is said that 60% of Europes production of concrete was being used in Spain in 2006. It is worth noting that the European Central Bank cannot necessarily intervene effectively in such a situation. For if inflation is low in one large part of the union, such as Germany, this may offset high inflation elsewhere in the union, with the result

that the average inflation rate throughout the zone is close to the ECB target, thus eliminating any requirement for intervention. So it appears that the combination of domestic inflationary pressures and low nominal interest rates contributed to dramatic shifts in competitiveness throughout the Eurozone and hence to the present crisis. But this is not to say that the Eurozone governments were free from blame. Competitiveness can be increased by labour market reform, especially by removing the regulatory barriers to internal competition often created by government itself. Moreover, some of the destabilising effects from external shocks can be at least partly offset by expansionary fiscal policy. However, fiscal policy has its limits as a means of protecting the economy from destabilising external shocks (Carlin 2011). Lags in fiscal policy decision-making and implementation make it highly inflexible as a policy instrument. The inherently political nature of tax and expenditure decisions means that the policy cannot be delegated to an independent authority such as the UKs monetary policy committee. And the build-up of government debt that may accompany an expansionary policy can create significant cost-of-borrowing problems, as indeed we have recently seen for Greece, Italy and Spain.

THE EXIT SOLUTION In one sense the obvious solution to the problem of different levels of competitiveness is for the relevant countries to quit the Eurozone, to re-establish their own currencies and to align the exchange rates between the new currencies in such a way as to recognise the differences in unit labour costs that underlie the competitiveness differentials. The new exchange rate could be fixed or floating. Whatever exact level emerged, in comparison with the old one-to-one, euro-to-euro nominal exchange rate, the new exchange rates would involve a devaluation for countries with relatively high unit labour costs, or a revaluation for countries with relatively low labour unit costs. This devaluation/revaluation would have the great merit of addressing the central problem to which we drew attention at the beginning of this submission: the differences in competitiveness between members of the eurozone. In this respect, it

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would be greatly superior to other measures that have been proposed, such as enforced public sector deficit reduction for over-spending governments, or balanced budget rules. For these do nothing to address the lack of competitiveness. However, any undertaking of this kind would be fraught with difficulties. The first concerns the risk of destabilising capital movements. As soon as the idea of devaluation became a likely possibility, mobile capital would flee the country concerned. Similarly, capital would pile into any country for which there was speculation that a revaluation was round the corner (as indeed we have seen recently with the Swiss franc). Second, there is the problem of foreign debt: that is, debts owed to institutions (or individuals) domiciled in other countries. For revaluations this is not a problem for domestic debtors, but one for foreign creditors. For devaluations, it is a problem for domestic debtors, and even for foreign creditors if there is a reasonable chance that the debt will not get paid. A particular version of this difficulty concerns government debt to foreign banks, already large with respect to several eurozone countries, and due to get larger if the countries concerned leave the eurozone and devalue. Thirdly, there are severe practical difficulties of introducing a new currency. As Eichengeen notes Computers would have to be reprogrammed. Vending machines will have to be modified. Payment machines will have to be serviced to prevent motorists from being trapped in subterranean parking garages. Notes and coins will have to be positioned around the country...... One need only recall the extensive planning that preceded the introduction of the physical euro (Eichengreen 2011, p.22). A fourth problem concerns the EU treaties, which do not incorporate any mechanism for a country to leave the euro. As noted by Athanassiou (2009), a member states expulsion from the EU or the European Monetary Union would be legally next to impossible. It would also be legally impossible for a member state unilaterally to withdraw from EMU. However, Athanassiou also notes a unilateral withdrawal from both EU and EMU would be possible a point to which we shall return below.

3. QIR: QUIT AND (INSTANTLY) REJOIN 11

So is there any way of achieving the benefits of quitting the euro and engaging in devaluation/revaluation, without incurring the costs? One way at least of overcoming some of the difficulties listed in the previous section involved in devaluation (revaluation) would be the following. At a given moment in time, a deficit (surplus) country withdraws from the euro and denominates all its financial transactions in a new currency (a temporary currency unit) at a given exchange rate. It then instantly rejoins the euro but at a weaker (stronger) exchange rate. One might call this policy QIR: quit and instantly rejoin. QIR would be a devaluation (revaluation) with all the same beneficial consequences for competitiveness, but without all the practical problems (printing and distributing notes and coins, etc) associated with a new currency. Especially in a world where many transactions are undertaken electronically, it would be relatively simple to implement, with all prices and wages still denominated in euros but marked down (up) by the amount of the devaluation (revaluation). QIR would be superior to the austerity measures such as those currently being invoked because, unlike those measures, they correct the underlying imbalances that created the problem in the first place such as (in the case of deficit countries) too high domestic wages and too low import prices. In addition, QIR would be both politically and economically superior to other measures aimed more directly at competitiveness, such as wage cuts. Because the latter create significant cuts in real incomes, they are enormously difficult to implement in practice; they are usually deeply opposed by a wide spectrum of political opinion, by powerful trade unions and by much of the rest of civil society, and have the potential for creating substantial civic disorder, as illustrated by recent events on the streets of Athens. In contrast, under QIR, real incomes remain largely unchanged, except for those who spend a large proportion of their incomes on imports, or who owe large debts to foreign institutions. In the case of a devaluation QIR, these are likely to be among the relatively well off, and thereby perhaps better placed to take some of the pain than those bearing the burden of the austerity measures already in place. Since the exit would be temporary - indeed almost instantaneous QIR might also help overcome the legal difficulty that no eurozone country can officially leave it 12

while remaining within the European Union. It could be argued that the absence of an escape mechanism in the Treaties were aimed at preventing permanent departures, not temporary ones. If that argument was not sufficient, an alternative might be to suspend the treaties for an instant a situation for which there are constitutional precedents within member states1. Alternatively, the legal situation could be resolved by the member state concerned leaving both the European Union and EMU which, as we saw earlier, does appear to be legally permitted and then instantly rejoining both. But that might create further complications concerning EU entry rules. On balance, the first route seems the most sensible: to undertake QIR, and to ride out any court challenge with the argument that the treaties do permit temporary exits. The capital movement problem remains. One answer to this is a temporary imposition of capital controls. Argentina, for instance, in its debt crisis of 2001 prevented its citizens from withdrawing more than $250 at any one time, and only allowed them to take $1000 for foreign trips. More generally, it is worth noting that, although capital movements are clearly a serious risk, their existence would not be a conclusive argument against QIR. For it is a problem associated with any devaluation/revaluation involving a convertible currency; yet it has not stopped such devaluations in the past, nor limited their long-term effectiveness in restoring competitiveness. Indeed such movements can characterise the actual or expected changes in any convertible currency, whether these occur through formal de- or revaluations, or simply through the ups and downs of a floating exchange rate. The fact that such changes do occur regularly, and usually (though not invariably) without massive destabilisation suggests that the danger can be overplayed. Moreover, one suspects that, in the present situation with respect to the euro zone, most mobile capital has already moved. Then there is the problem of foreign debt. Again, it is possible to exaggerate the magnitude of this issue. As we have emphasised several times, the key factor underlying QIR is that it addresses the fundamental problem of differences in competitiveness between countries. As such, QIR should restore the relevant external accounts to balance and significantly increase debtor countries ability to repay their
1

As a correspondent from the European Commission has pointed out to me, a parallel could be drawn with King Baudouin of Belgium quitting for one day when abortion legislation had to be signed! 13

debts. Of course, this would not happen overnight, so there will be a short-term problem of debt repayment; but this could be addressed by a restructuring of shortterm debt into long-term debt. Although QIR resolves many of the practical difficulties associated with devaluation/revaluation and the introduction of a new currency, there is one that it shares with them: that of enforcement. There will have to be some mechanism for ensuring that prices, wages and the financial accounts in the countries concerned do change by the required amount. However, as noted above, both the process and its enforcement would be facilitated by the fact that many transactions are now carried out electronically in both public and private sectors Market forces would also contribute. For instance, in the case of a devaluation, if money wages fall, money demand falls, and money prices would have to fall if producers are to sell their products; if money prices fall, then producers have to reduce money wages. The reverse process would operate with a revaluation; in fact, it be smoother in all probability, since it is psychologically and politically easier to raise wages, even if prices follow, than to lower them. But there is no doubt that both the process and its enforcement would be easier the more efficient the administrative capacity of the country concerned. And this raises the question as to which countries might be the most appropriate to engage with QIR. Obvious candidates for a devaluation QIR are the principal deficit countries of Greece, Italy, Spain and Portugal. However, some of these countries already face problems in the administration of tax collection, and the organisational effort involved in enforcing QIR would be greater than that - although, unlike tax collection, it would only one be a one-off event. But there is an attractive alternative. Inspection of Figures 1 and 2 and Tables A1 and A2 in the Annex suggests that the country that, in a perverse sense, is the source of much of the problem is Germany, with a dramatic increase in competitiveness of nearly 20% in the period 1999-2010, one of only ttwo to show such a surplus. Hence a German revaluation QIR might be more appropriate than a devaluation QIR in the other countries.

Of all the members of the eurozone, Germany is probably the one with the greatest general administrative capacity; and, given that, as noted above, revaluation QIRs are

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almost certainly easier to implement than devaluation ones, there are strong administrative reasons why a single German revaluation QIR would be superior to several devaluation QIRs for the deficit countries. Moreover, a revaluation QIR would be of great benefit to Germany, with economic, social and political benefits. There would be an increase in the purchasing power of German households, especially for those that spent a large portion of their income on imports (or foreign travel), or who had debts to non-German euro institutions. Apart from a one-off increase in prices (that would, of course, be matched by a one-off increase in wages) the result would be highly deflationary which should appeal to German monetary concerns. And German households would not have to bear the consequences of bailing out the weaker members of the Eurozone. Finally, it is worth noting that a German revaluation QIR would not let the deficit countries off the hook. If they do not address the problems that led to the loss in competitiveness in the first place, then QIR (of either kind) will simply prove to be a temporary solution. If wage and price inflation in Germany remains lower than elsewhere, Germany will regain its competitive advantage. More generally, these changes in real exchange rates must be persistent; for, if they are undermined by higher inflation in the devaluing countries and lower inflation in the revaluing ones, the problem will re-emerge. Some mechanism would be necessary through which the QIR could be coupled with incentives for countries to undertake the necessary supplyside measures to make the short-run boost to competitiveness have a long term effect. ! This could take the form of a conditional agreement: Germany would agree to a revaluation QIR (or agree to allowing deficit countries a devaluation QIR) if those deficit countries agreed to adopt a package of supply-side measures: one that directly addressed their lack of long-term competitiveness.! CONCLUSION The answer offered in this submission to the Wolfson question is that the future growth and prosperity of the current membership would be best served if member states that leave the European Monetary Union instantly rejoin it either at a stronger rate for surplus countries, such as Germany, (a revaluation QIR) or at a weaker rate for deficit countries, such as Greece, (a devaluation QIR). Of these two options, the

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one most likely to be successfully implemented and to succeed in creating growth and prosperity is a revaluation QIR for Germany.

QIRs of either form are not a solution to all the eurozones problems. Structural factors contributing to differences in competitiveness between member states, such as the inflexibility of labour markets and differences in wage-setting institutions would remain, and would need attention to prevent the problem of differences in competitiveness recurring. Measures for dealing with this would have to form part of a Eurozone-wide agreement that accompanied the implementation of QIR. Nor is QIR is devoid of practical and political difficulties of implementation although these would be minimised in the case of a German revaluation QIR. In fact, these kinds of problem also characterise most of the alternative measures that have been implemented or proposed to defuse the crisis; and a respectable case can be made that QIR is in many ways the least worst. Moreover, QIR does have one cardinal merit, one that many of the alternatives lack: it is a proposal that could defuse the short-term crisis and that - unlike almost all the alternatives would also directly address the fundamental problem of competitiveness that created the crisis in the first place.

REFERENCES Athanasssiou, P. (2009) Withdrawal and Expulsion from the EU and EMU: Some Reflections. European Central Bank Legal Working Paper Series, No 10, December. Carlin, W. (2011) Real exchange rate adjustment, wage-setting institutions and fiscal stabilization policy: lessons of the Eurozones first decade. http://www.ucl.ac.uk/~uctpa36/Real%20exchange%20rate%20adjustment%20Eurozo ne.pdf Carlin, W. and Soskice, D. (2006) Macroeconomics: Imperfections, Institutions and Policies Oxford: Oxford University Press. Carlin, W. and Soskice, D. (forthcoming) Macroeconomics: Finance, Stability and Crisis Oxford: Oxford University Press. Eichengreen, B. (forthcoming) Implications of the Euros crisis for international monetary reform Journal of Economic Policy Modelling. 16

Eichengreen, B. (2011) The break-up of the Euro area in A. Alesina and F. Giavezzi (eds) Europe and the Euro Chicago: University of Chicago Press Goodhart, C. (2007) Currency unions: some lessons from the eurozone Atl Econ J 35: 1-21 Wolf, M. (2011) Thinking through the unthinkable Financial Times 8 November.

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ANNEX TABLES TABLE A1 Unit labour costs for whole economy relative to EU17: selected member states Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Germany 100 98.9 96.3 94.1 92.6 91.1 88.6 85.2 82.8 81.2 82.4 82 Greece 100 97.2 93.6 100.8 99.9 101.4 104.1 101.3 103.8 107.8 110.2 109.2 Spain 100 101.4 102.2 102.8 103.4 105.3 107.6 110.5 113.9 115.3 112.1 109.9 France 100 100.1 100 100.7 100.5 100.8 101.6 103 103.4 102.8 101.7 103.6 Ireland 100 101.9 105.5 103.9 105.6 109.4 114.7 118.8 122.5 127.3 118.9 111.5
Italy

Portugal 100 103 104.6 105.5 107.3 107.4 109.7 109.4 108.7 108.4 108 107.8

100 99.7 100.4 101.7 104.4 105.9 107.2 109 109.3 110.5 110.3 111.1

Source: European Commission http://ec.europa.eu/economy_finance/publications/pcqr/2011/pdf/pccr311_en_pdf

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TABLE A.2 Unit labour costs for whole economy relative to EU17: Germany and rest of Eurozone
."/0-*$( !"#$% !"#$%&'( )*+,#-%( %&1( 2*3"$4*#0( !"""# $%%%# $%%!# $%%$# $%%&# $%%'# $%%(# $%%)# $%%*# $%%+# $%%"# $%!%# "##$#! %&$%! %*$)! %($"! %'$*! %"$"! &&$*! &,$'! &'$&! &"$'! &'$(! &'$#! "##$#! %&$&! %+$%! %*$'! %,$,! %($"! %($,! %,$)! %,$#! %,$#! %,$'! %,$&! "##$#! %%$"! "#"$#! "##$%! %%$%! %&$*! %%$'! "##$,! "#"$*! "#'$*! "#'$"! "#'$%! "##$#! "#'$(! "#"$&! "#)$&! "#%$%! """$"! ""'$)! ""'$+! ""#$%! "#+$,! "#+$"! "#%$+! "##$#! "#"$)! "#"$,! "#"$#! "#($'! "#%$*! ""'$*! "''$*! "('$)! ",*$'! ",#$%! "()$%! "##$#! %%$)! "##$+! %%$)! %&$#! %+$)! %&$,! %&$(! %+$*! %%$&! "#'$&! "#'$)! "##$#! "#($&! ""'$#! "#&$+! "#&$,! "#%$*! "#+$'! ""#$(! "#%$+! "#&$%! "#%$+! "#%$+! "##$#! "#"$%! "#,$"! "#&$"! "#%$#! "#&$+! "#+$'! "#+$*! "#&$(! "#+$&! "#&$+! "#&$&! "##$#! ""'$)! """$,! "",$(! "'"$,! "'%$(! ")%$'! "(*$)! "*#$#! "+)$,! "&,$"! "&($'! "##$#! %%$%! "#"$)! "#"$,! "##$)! "#"$"! "#"$,! "#'$"! "#)$&! "#*$)! ""#$,! """$+! 5'6#*+( 7+,8&-%( 9-&/%&1( :%/,%( ;",<"#/%&1+( =/8>%?-%( =/8>"&-%(

Source: European Commission http://ec.europa.eu/economy_finance/publications/pcqr/2011/pdf/pccr311_en_pdf

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