Category Archives: Labour costs

15/7/15: Is it Trust or Fiscal Performance? Greece v Excessive Deficit Procedures

As noted in the previous post, that Trustless Greece apparently is a better example of European policies of internal devaluation at work than the best-in-class Ireland. At least by metric of competitiveness.

But what about Fiscal Trust? After all, there is a unifying metric for that one - the European Commission own Excessive Deficit Procedure. And here is a handy table from EU Commission own presentation on the topic:

Yes, yes... a little help. Since 1997 (that is across the Celtic Tiger era boom too), Ireland was on the penalty bench with EU in relation to breaking fiscal rules for 11 years. Greece - also 11 years. One has zero Trust in its EU account. The other has Fort Knox worth of that 'hard' EU currency...

Either the Rule is dodgy or something's fishy in the arithmetic...

15/7/15: Is it Trust or Competitiveness? Greece v Unit Labour Costs

Remember hard currency of Europe - no not the euro - Trust? And remember how Greeks lack that currency because of failed reforms and incomplete adjustments?

Here's a nice chart from the EU Commission itself showing changes in economic competitiveness (the EU fetishised) metric of Unit Labour Costs.

In this, untrustworthy Greece is more competitive in 2013-2015 than the best-in-class Ireland. 

So if the internal devaluations work their magic, as the EU seems to believe, then by this metric, Greece should have been a roaring success story... with a surplus of Trust to spare some for Ireland.

Then, again, the EU won't notice other factors at play in determining GDP growth. The idiosyncratic ones, like, say, corporate tax inversions and 'knowledge development boxes' or (whispering) taxation double-sandwiches for lunch... Because everything is about Trust in Europe...