Advanced Search
MyIDEAS: Login to save this paper or follow this series

Ist eine Deregulierung der Arbeitsmärkte in den südlichen EU-Staaten zur Bekämpfung der Eurokrise sinnvoll?
[Does deregulation of labor markets in Southern EU-countries solve the Euro crisis?]

Contents:

Author Info

  • Fischer, Justina AV

Abstract

One solution to the euro crisis as a debt crisis can be found in stimulating economic growth. The Troika has proposed measures to deregulate labor markets in Southern EU countries: a longer working week, relaxation of job dismissal laws, raising the age of retirement. A longer working week for the same pay is the same as a de facto wage cut. A loosening of dismissal laws can be seen as an attempt to increase worker productivity against the threat of disciplinary action but may also increase the willingness of employers to take on new staff. Raising the age of retirement helps ease the labor cost burden on employers. Due to the structural differences in the economies of Southern Europe, a programme of deregulation based on lower wages only will not solve the euro crisis. Only in the case of Greece, Europe’s biggest 'problem child', would a general wage cut lead to improved competitiveness – regardless of the pain such a reform would cause. This is because Greece’s neighbours Turkey and Bulgaria, both offer the same products in the areas of tourism (“Sun, Sea and Sand”) and regional foodstuffs (olive oil, ewe’s milk cheese) but at a lower price. On the other hand, for Spain and Portugal efforts to stimulate innovation and increase productivity in the major industrial and agricultural businesses are recommended, while in Italy improving the quality in its luxury sector (wine, design, cultural tourism) would seem to make better sense than deregulating their lbor markets. It is also open to debate whether a foreign company would base its decision to locate to a particular European country solely on the existence of a flexible low wage sector. Europe has other factors in its favour such as high educational levels, a well-developed infrastructure, political and social stability as well as local cultural highlights and a high quality natural environment; labour-intensive industrial mass production is offered far cheaper in China and Vietnam. Of equal importance is the Troika’s insistence on combating nepotism and corruption. An economic policy that promotes productivity and quality will in the long run also prevent the creation of extreme disparities in income and thereby ensure social cohesion.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/41543/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 41543.

as in new window
Length:
Date of creation: 24 Sep 2012
Date of revision:
Handle: RePEc:pra:mprapa:41543

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: Euro; Eurocrisis; debt crisis; labor market; deregulation; EU; Greece; Italy; Spain; Portugal;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy," MPRA Paper, University Library of Munich, Germany 36990, University Library of Munich, Germany.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:41543. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.