Greek European Commissioner Maria Damanaki recently noted, “‘The strategy of the European Commission over the past year and a half or two has been to reduce the labour costs in all European countries in order to improve the competitiveness of European companies over the rivals from Eastern Europe and Asia.’”
Complete rubbish. The “strategy” behind periphery austerity is make the periphery more competitive relative to the core: a way of doing the job that involves large social costs, but that’s common currencies for you.
In contrast, making the Eurozone AS A WHOLE more competitive relative to Asia etc can be achieved by devaluing the Euro relative to other currencies. No need for austerity in the latter case.