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Fears over double dip

TOO much emphasis on wage cuts and austerity could lead to a double dip recession, the EU's employment commissioner, economist Laszlo Andor has warned.

Mr Andor said that wages were only part of the equation of making a country competitive, while productivity was more important.

Speaking at a conference on wages and the global crisis, the commissioner said that the effect of a drop in wage share in a country's economy on the government's income must also be taken into account.

Income tax is the biggest source of tax revenue amounting to 52pc in 2009 for the EU27, he pointed out.