So now we have a unified monetary policy, but without a balancing unified emploment policy, for instance, and the kind of employment policy advocated here is focused on controlling wages, supposedly to fight inflation. Phrasing it in terms of "moderating unit labour costs" gives the game away: seeing wages as a cost only indicates the problem is framed from the perspective of business owners. As "controlling inflation" is the job if the independent ECB, the putative Eurozone economic policy of the governments should focus on things other than controlling inflation. Those whom the Gods wish to destroy They first make mad. -- Euripides
regarding the unit labour cost aspect, it is indeed not only a question of moderating them (what you tag the "business perspective" in view of increasing competitiveness).
In fact, the argument also holds the other way round. See e.g. the debate on too low unit labour costs in Germany recently, which not only dampened domestic demand, but also increased the problem of competitiveness e.g. for Italy and others. This of course cannot be ordered on anybody, but we definetely need to improve dialogue among the three pillars fiscal-monetary-wage policy, and work on the need that all actors increasingly interpret their perspectives in the EMU environment.
Best, Daniela
