Die Bedeutung der Wettbewerbsfähigkeit auf dem Weg aus der Krise im Eurogebiet

Several countries in the euro area still face a competitiveness problem. This problem is to a considerable extent due to wage growth in the past that was excessive, relative to productivity growth and relative to the performance of their competitors. As a result, firms in these countries invest less than desirable to create new jobs. This article reconfirms price and cost considerations at the core of competitiveness and explains why this concept is of fundamental importance in a monetary union. It explains how wage growth could be misguided in the past in the euro area and discusses policy options ahead. In doing so, it highlights the economic and political economy challenges of adjusting wage policy between surplus and deficit countries. The article also touches upon structural competitiveness issues and outlines the scope for reform in this area.