The Relationship Between Wages and Productivity in the EU
February 8, 2026
The European Commission's report examines the impact of inflation and wage increases on economic competitiveness. There is significant heterogeneity in inflation among EU countries, which affects productivity support. In countries like Ireland, Cyprus, and Malta, productivity has surpassed the increase in real wages, leading to better economic performance. Conversely, in countries like Lithuania and Croatia, wage increases have outpaced productivity growth. The report emphasizes the importance of aligning wages with productivity to maintain competitiveness.