EU Gets Labor Market Slack Wrong in France, Italy and Spain

EU Gets Labor Market Slack Wrong in France, Italy and Spain

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The European Commission is probably underestimating labor market slack in France, Italy and Spain, according to Bloomberg Economics. That may sound like a technical point, but it has real life consequences -- limiting how much these countries can spend before falling foul of budget deficit rules imposed by Brussels. BE thinks the job markets in the three countries still had some way to go before reaching potential, while Germany might already have been operating above potential last year.

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