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If the EU were a sensible body interested in creating convergence towards a higher standard of living, the concern would be about how to increase productivity.
it's difficult I note to be productive when there are no jobs out there
But every time you lay off a worker or cut his wages you increase "productivity". Could part of the problem be the way in which we understand, conceptualize and use the term "productivity".?
For example, labor productivity is typically measured as a ratio of output per labor-hour, an input.
So, according to this definition, widely used by "mainstream economics" by saving GM and Chrysler a large increase in productivity was foregone. This is a fallacy of composition error. It fails to take into account the knock on effects of losing the US parts manufactures, which could have seriously damaged Ford, the one auto manufacturer that did not require a bail out. Optimize productivity and you end up with no industry in high wage countries.
The Sacred Chalice of Productivity needs to be prominently labeled as "POISON, USE WITH CAUTION!".
As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere." (But it helps!)
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