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But the euro is a wealth transfer mechanism. It transfers wealth from the poor to the stinking rich. So from the poor in both Germany and Greece to the stinking rich in both Germany and Greece.

If German workers got paid enough to keep Germanys trade balanced, they could afford more holidays in Greece and the workers in Greece could then afford more industrial goods from Germany. Instead we get Harz in Germany to push wages (though they call it inflation) down and slaughter of jobs, wages and rights for workers in Greece.

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by A swedish kind of death on Tue Feb 14th, 2012 at 04:27:30 PM EST
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I still don't understand how welfare and unemployment benefits (aka Hart IV) are related to the rise of wages, or lack thereof.

Can you explain?

by cris0 on Tue Feb 14th, 2012 at 04:53:27 PM EST
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Reducing unemployment benefits and making the unemployed jump through useless hoops will reduce wages, no?

- Jake

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by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Feb 14th, 2012 at 04:58:08 PM EST
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Reducing welfare and unemployment benefits creates greater precarity for the less well-off, leading to employers being able to impose less advantageous working conditions and lower wages.

And in fact, unit labour costs in Germany have fallen in relation to those of other eurozone countries since the implementation of Hartz IV.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Feb 14th, 2012 at 04:58:18 PM EST
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