I would like to know the contribution of time inconsistency of policies to the slowdown in economic growth. Basically, if you cannot believe in agreements signed with the Government, this should have a cost in terms of economic activity.
This was brought again to my mind by the agreement on minimum wage - It was signed 4 years ago an agreement involving the Government, the unions and the industry associations (I think the industry associations signed it, not sure, but it is not essential). It stated that minimum wage should go to 500€/month in phased way.
Now, industry associations want the Government to refrain from it, based on the bad economic conditions. Unions (and left wing parties) argue the Government should stick to the agreement.
For once, I agree with the later on the grounds of consistency of policies (they use other arguments, of course). Actually, it is in the interest of the industry associations that
the Government does it. Otherwise, any agreement with the Government becomes only valid until the next convenient moment to change it? and if instead of minimum wage would be a VAT tax? or an exceptional tax on sales with "frozen" prices? A bit demagogic, I know, but once you enter the uncertainty that agreements do not bind the parties, everything goes.
Moreover, I was puzzled by a news report stating that some computations made by the Government showed little impact associated with the minimum wage increase.
Overall, without entering the discussion of whether a minimum wage has negative effects upon employment and growth of economic activity, I feel that not respecting agreements must also be damaging, in a hardly visible way.