inequality and the crisis : the story from europe · story from europe . from inequality to euro...
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INEQUALITY AND THE CRISIS : THE STORY FROM EUROPE
FROM INEQUALITY TO EURO CRISIS
A BIT MORE COMPLICATED STORY IN THE EURO AREA (1)
A BIT MORE COMPLICATED STORY IN THE EURO AREA (2)
Still too high for Germany’s depressed state of the economyFar too low for the ‘peripheral’ economies
-10
0
10
20
30
40
50
60
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
DE
IE
EL
ES
IT
CY
LU
MT
SL
SK
UNIT LABOUR COSTS 1999 = 100
CAPITAL FLOWS UNBALANCING THE EURO AREA
HOUSEHOLD DEBT LOADS
FROM CRISIS TO HIGHER INEQUALITIES
HEAVY FISCAL AUSTERITY ….
…. MAINLY ON THE EXPENDITURE SIDE
0
5
10
15
20
25
Euro Area Spain Greece Ireland Portugal Italy UK France Belgium
Expenditure cuts
Tax hikes
POLICY OF INTERNAL DEVALUATION
ILLUSTRATION: DG ECIN’S « LABREF » DATABASE ON STRUCTURAL REFORMS
« An ‘employment friendly’ reform is a reform that ‘reduces the wage setting power of trade unions’ »
(Source: Labour Market developmentsreport from Autumn 2012)
IT « WORKS » (UNIT LABOUR COSTS SINCE 1999 UPDATED)
-5
0
5
10
15
20
25
30
35
40
99 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Belgium
France
Germany
Price stability line
Spain
Greece
INEQUALITY INCREASING AT THE BOTTOM OF THE INCOME DISTRIBUTION
ANCHORED POVERTY RATES
ANCHORED POVERTY RATES OF CHILDREN
CONCLUSION
