Throughout the Eurozone crisis, too little attention has been paid to wage-setting. This is surprising given that wages and currency union have been discussed together since the 1960s. Likewise, recent scholarship has identified wages at the heart of the crisis, where the social partners in core countries have successfully managed wage-growth under EMU, whereas troubled peripheral ones have not. Nonetheless, little work has engaged with individual labour market models under EMU. This paper addresses this gap, dissecting labour market models by level of centralization, their coordination mechanism, and the indicators to which they are calibrated. Examining Belgian reform debates, high centralization and top-down coordination has kept wages highly coordinated under EMU, while calibrating the system to inflation and a ‘wage norm’ means that it struggles to contain unit labour costs while leaving the social partners little scope to negotiate. Thus, it is over calibration where the debate is best centred.
