Sunday, January 15, 2012
Language and the Euro-zone crisis
Article in the FT 1/12/12, "Greeks and Spaniards line up to learn the language of Goethe" is telling of one key monetary union issue. To solve the problem of unemployment across countries within the Euro-zone, there has to be mobility between countries so that there can be equalization of employment. Labor has to move to low unemployment regions. The southern unemployed have to move to the key northern, German, regions.
This labor movement is restricted when there is a set of countries within a monetary zone which do not have common language. There cannot be the free movement of labor like the free movement of capital when there is a language barrier. If those who are unemployed can learn languages, then there can be the potential for labor movement. This is not going to solve the Euro-zone problems but it clearly shows what is one of the key impediments to labor problems across countries. The unemployed know it and are trying to address it through private means.