Luxembourg, 25/08/2000 (Agence Europe) - In its Economic Affairs Series, the Directorate General for Studies at the European Parliament has published a working paper on the cost of labour and salary policy in the EMU drafted, under the responsibility of Ben Patterson, by Daniel Gros and Carsten Hefeker, in which the authors mainly affirm that the impact of EMU on salary fixing behaviour is difficult to determine. Regarding the matter of knowing whether a rise in incomes would increase the level of employment (a thesis mainly propounded by former German Finance Minister Oskar Lafontaine) because it would stimulate demand, the report notes that this would mean that workers should spend their additional income without putting any aside, which is "hardly likely, above all in the current situation". The report also stresses that, while salary moderation has been a feature of the way most Member States have behaved over the past few years, the situation is changing if one takes into account compulsory levies: thus, the increase in income tax has neutralised the beneficial effect that salary moderation could have.
Furthermore, the report also examines the possibilities of "explicit trade union coordination at the euro zone scale", considering that there are "few" possibilities, and also that of allowing, in large Member States, regional situations to have a greater impact on earnings. The authors state they are quite in favour of this second scenario and consider "one should allow local salaries to be adjusted to local conditions of the labour market", given that most large Member States are formed of regions presenting "enormous disparity in terms of unemployment and industrial structures".
(Address: European Parliament, Directorate General for Studies, "Economic Affairs" Division, L-2929 Luxembourg. E-mail: gpatterson@europarl.eu.int)