Abstract

The paper analyzes the long term dynamics of the relationship between the competitiveness and the unemployment in the Eurozone, with the emphasis on the “North” and “South” differences. Using the productivity per person as a proxy for competitiveness, it shows both the differences between the North and South of the Eurozone and the differences between the pre-crisis and crisis periods in both areas. Moreover, it demonstrates that the relationship between the competitiveness and unemployment is negative in the North and undetectable in the most of the South. These results indicate that the recent gains in competitiveness can be preserved – and even perhaps extended – without the negative impact on employment. Indeed, in this context the structural reforms are the key.

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