These changes allowed Germany to rise to the multiple challenges stemming from German unification, the competitive pressures from EU enlargement to the east, and globalisation. By the way, even today and against the background of almost full capacity utilisation the wage settlements are still mindful of their employment effects. The Bundesbank’s focus with regard to wages is purely analytical.
The crucial question is here, whether their development is in line with our main objective: price stability. And in this regard we have in particular to check for second-round effects. According to our analysis such second-round effects can currently be denied for Germany. This perspective on wages is not a policy recommendation.