Deutsche Welle – 19/8/2018

“The important thing is for productivity to rise so that wages can increase,” Pagoulatos says. “During most of the crisis period, many of the gains in competitiveness from wage compression were canceled by other factors, such as the higher tax burden and social security costs, energy costs and cost of credit.” This caused thousands of companies to either close up shop or transfer their operations to bases that were less tax-intensive, further weakening the economy.

When the crisis hit hardest in 2010, labor costs were the highest they had been in at least a decade. They dropped markedly from this peak: “The fiscal restructuring that took place as part of the stability program with the EU reduced the cost of labor significantly,” says George Pagoulatos, professor of European politics and economy at the Athens University of Economics and Business.

You May Also Like