Warnings against too much austerity

TOO much austerity and emphasis on cutting wages could lead to a double dip recession, poverty growth and a break down of communities in the EU, a conference on wages and the global crisis heard.

The warning came from the EU’s employment commissioner, economist Laszlo Andor, who said that wages were only part of the equation of making a country competitive, while productivity was more important.

The cut in wages across Europe did not result in companies investing productively the money they saved. “We need to find better ways to use profitability to boost investment so that productivity as well as employment increases”, he said.