Brussels warns on Spanish and Slovenian 'imbalances'

 UK hourly labour costs have fallen nearly two euros (£1.7; $2.6) below the EU average, data from the EU’s statistics agency Eurostat show.

The EU average in 2012 was 23.4 euros hourly – and in the UK it was 21.6.

Eurostat calls the figures estimates, based on enterprises with 10 or more staff. Labour costs mean wages plus some other costs such as employers’ social contributions.

The costs vary widely in the EU – from 3.7 euros in Bulgaria to 39 in Sweden.

The Eurostat data were given in euros to enable comparison across the EU. The data cover the whole economy except for agriculture and public administration.

In the UK, hourly labour costs rose on average from 20.9 euros in 2008 to 21.6 euros in 2012 – a 3.3% rise. But measured in pounds sterling, and taking account of exchange rate fluctuations, the increase was 5.2%.

Eurostat says that in 2012 the non-wage costs for employers, as a share of total labour costs, were highest in France (33.6%), Sweden (33.3%) and Lithuania (28.3%). The UK was at the lower end of the scale – 15.1%, but even lower were Denmark (12.4%) and Luxembourg (13.4%).

In the eurozone the biggest increases in labour costs since 2008 were in Austria (15.5%), Slovakia (13.8%) and Finland (13.7%).

There was a big decrease of 11.2% in Greece – coinciding with the country’s financial crisis.

In non-eurozone countries the biggest increases were in Bulgaria (42.6%) and Sweden (23.3%).The European Commission has warned that Spain and Slovenia must quickly tackle the imbalances in their economies.

Spain has already had its banking system bailed out and Slovenia is widely expected to become the next to ask for for a debt rescue.

The Commission said the pair are the worst of the 13 European Union countries currently under review.

It called on Spain to deliver a “decisive” reform programme by the end of the month.

The imbalances in debt, unemployment and growth were doing long-term damage, with more than half of under-25s unable to find a job, the Commission said.

“Our (European) citizens are still paying the price for the unchecked development of imbalances in the past,” it said in a statement.

“Urgent policy action needed”

Brussels highlighted the plight of banks in Slovenia by saying that “urgent policy action is needed”.

The new Slovenian prime minister, Alenka Bratusek, insisted on Tuesday that her government was already working “day and night” to save the country’s banking system.

The Commission said that the other 11 European Union countries experiencing “macroeconomic imbalances” to a lesser degree than Spain or Slovenia were Belgium, Bulgaria, Denmark, France, Italy, Hungary, Malta, the Netherlands, Finland, Sweden and the United Kingdom.

Source-BBC