Such measures should raise productivity growth, but wage restraint will still be needed to restore competitiveness.
Without the ability to devalue, the restoration of competitiveness requires painful austerity measures and wage restraint.
German workers are pushing for higher pay too, after a long period of wage restraint.
The Treasury was quick to call for further wage restraint in both the public and private sector.
Mr. King has often pointed to wage restraint as a sign of success.
Many European countries, notably the Netherlands, France and Spain, have combined labour-market reforms with wage restraint in recent years.
Unaccountably, he decided to hang on until the next year despite signs that the unions could no longer deliver wage restraint.
The first minister insisted "substantial progress" had been made with the budget focussing on wage restraint while protecting those in the public sector on the lowest wage.
In some cases it started off as a form of wage restraint in the dark days of the 1990s: companies cut basic wages and employees hoped that performance-related pay might make up the difference, which it did not always do.
They read the foreign press like anyone else, and they know the case that is made against them: namely that Germany deluded itself for years that it was a model of virtue because it was an export champion, offsetting relatively weak domestic consumption linked to wage restraint and high savings rates.
And however they are paid for, the knock-on effects of a high minimum wage would be hard to reconcile with Gordon Brown's call this week for pay restraint.
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