Light at end of tunnel at last in ravaged Greece

Tim Wallace
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EUROPE’S most damaged economies are starting to rebalance, new figures showed yesterday, giving leaders hope at last that the tough discipline imposed by the Eurozone is at last starting to improve competitiveness.

Labour costs in Greece have tumbled sharply at last as it goes through its sixth year of recession, Eurostat data revealed. Spain’s are down too.

At the same time those in Germany have continued to rise, showing the peripheral economies regaining some of their lost competitiveness.

Hourly labour costs in Greece stood at €14.90 (£12.70) in 2012, down from €16.20 in 2011 and €17.00 in 2010.

Meanwhile costs in Spain rose slowly to peak at €21.20 in 2011, dipping for the first time to €21.00 in 2012.

Costs in Portugal have remained static at €24.00 for the past three years, while those in Ireland were €29.10 last year, down from their 2009 peak of €29.30. By contrast costs in Germany have risen 9.1 per cent from 2008 to €30.4 per hour.

France’s costs over the same period rose 9.5 per cent to €34.20, and the UK’s edged up 3.3 per cent to €21.60.

“Decisive policy action by member states and at EU-level is helping to rebalance the European economy,” said commissioner Ollie Rehn.

“But significant challenges remain: it will take some time yet to complete the unwinding of the imbalances that were able to grow unchecked in the decade up to the crisis, and which continue to take a toll on our economies.”

The UK also benefits from low non-wage costs of employment, like taxes and regulation, amounting to 15.1 per cent of the total – compared with 33.6 per cent in France.