Private-sector wage cuts did not happen on the scale needed to allow the increase in cost competitiveness that the deflation engineered to be effective. Unit labor costs were downwardly sticky during austerity programs despite massive public-sector cuts. This means only wage increases in Western Europe would make REBLL relative wages fall to more competitive levels, and that is hardly likely to happen in Western Europe in the middle of an austerity-induced double-dip recession. Similarly, REBLL austerity packages did not cut budget deficits as abruptly as the theory said they should. Latvia, Lithuania, and Romania ran much higher budget deficits at the peak of their austerity programs in 2009−2010 than did either Greece or Spain.

Mark Blyth, Austerity, loc. 607