Bloomberg.com: ECB's Trichet Says Productivity Is Europe's `Main Liability' - by John Fraher

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ECB's Trichet Says Productivity Is Europe's `Main Liability' - by John Fraher

European Central Bank President Jean-Claude Trichet said labor productivity is the biggest problem facing the economy of the dozen euro nations. ``The main, main liability we have'' in Europe is ``progress in labor productivity, which is significantly inferior to the present level in the U.S.,'' said Trichet, who was taking part in a panel discussion today organized by the Bertelsmann Foundation in Berlin.

Output per hour in the dozen euro nations is between 1 percent and 1.2 percent, compared with a U.S. rate of about 2.4 percent, Trichet said. Growth in the euro region's $10 trillion economy has lagged the U.S. in every year since 2001 partly as companies moved labor to cheaper locations in eastern Europe and Asia and avoided hiring in Europe. The jobless rate was 7.8 percent in July compared with 4.8 percent in the U.S.