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Frankfurt has noticed

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Germany’s man at the ECB, Jörg Asmussen, during a tough speech in Athens today:

It is difficult to ask voters in a country where average public sector wages are around €1000 per month, like in Estonia or Slovakia, to lend to a country where those wages are on average around €3000. The same holds true for emerging countries outside the euro area who participate in the financial assistance for Greece via the IMF. Some of those even went through very painful but ultimately successful adjustment programmes themselves; take Brazil for example.

Fact: Average earnings per week in the Irish public sector are around €900 (source: CSO employment costs survey). Whether that’s “fair” or “meaningful” is a separate row. The news is that the ECB thinks that it’s high for a country dependent on the kindness of official creditors.

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6 Responses to “Frankfurt has noticed”

  1. # Comment by Pidge Jul 2nd, 2012 22:07

    Not a good idea to compare figures from a speech (when you have no idea how they’re calculated or where they come from) with a different set of specific figures.

    If you look at administrative public sector wages, Ireland tends to be roughly twice as high in terms of public sector wages compared to Estonia. There’s a decent analysis of the comparable data here:

    Obviously Estonia having lower public sector pay doesn’t tell us that Irish pay should be lower, but I don’t think the comparison you’ve made in the blog post is worthwhile or useful.

  2. # Comment by Betty Jul 2nd, 2012 23:07

    A problem is the word “average”. there are many in the public service on modest pay which brings down the “average”but conceals exorbidant pay at the upper levels but when European politicians want to pontificate they only use the top figures(which are indefensible)and getting worse .

  3. # Comment by talos Jul 3rd, 2012 00:07

    I think it is important to point out that in Greece, which was the supposed target of Mr. Asmussen’s remark, the average public sector wage is very far from 3000 Euros. A university graduate p.e. with 17 years of service (thus far from your average public servant) right now earns something like 1650 Euros per month (12 payments per year) *gross*. And that is before one factors in purchasing power and much higher social security contributions in Greece. If he’s talking net, there is no University professor in Greece, I would reckon, that makes more than 2500 net at this time…
    So Asmussen really doesn’t know what he is talking about… Note that this is not the first time he has displayed breathtaking ignorance of the reality of the Greek economy

  4. # Comment by Gerri McCaffery Jul 3rd, 2012 09:07

    The problem with all of these comparisons of income across Europe is that no account of the cost of living in each country is taken. The same argument is often made by employer groups on the subject of competitiveness. When the cost of basic food items, transport, utilities etc is higher here than in many EU countries, there is little point in trying to bring salaries down to Estonian levels.

  5. # Comment by EddieL Jul 3rd, 2012 20:07

    It speaks volumes for the €uro project that wages cannot even be compared, not to mind harmonised between the eorozone countries.
    It just shows that the people who brought in the €uro must have their mind on other things besides the benefit the €uro was going to bring to the ordinary person.

  6. # Comment by basketball jordan Aug 17th, 2012 09:08

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