MACROECONOMIC DIALOGUE : SOCIAL PARTNERS IN CONFLICT OVER WAGES.

The European Trade Union Confederation (ETUC) will not begin reflections on the question of wages, as was proposed by employers' associations during the macroeconomic dialogue, on 14 February. The day before the Council of finance ministers, the ETUC informed the European Central Bank (ECB), the Council, the European Commission and the other social partners that it would not accept "a system of economic governance or a change in the EU treaty turning wages into the single instrument of adjustment".

However, for BusinessEurope and the European Association of Craft, Small and Medium-sized Enterprises (UEAPME), the debate on economic governance and excessive deficits must be accompanied by reflections on the evolution of wages. "The evolution of non-sustainable wages is one of the main reasons for the present imbalances in the eurozone. This question must be addressed at a national level, but we should also have a discussion at an EU level," saidaUEAPME Secretary-General Andrea Benassi, encouraging trade unions to reconsider their stiff opposition to an alignment of wages with productivity levels. BusinessEurope Director-General Phillipe de Buck added: "The crisis has clearly demonstrated to us that competitiveness adjustments are not functioning properly or quickly enough. This is particularly true in the euro area. This is due to a combination of labour and product market rigidities. This is due to inflexible wage-setting mechanisms, this is due to poor fiscal management in good times, this is due to lax prudential rules...