I’m not sure what point you are trying to make here. I think we agree flexible labour markets are important. In Germany and France, were labour markets are not so flexible, there is a circa 10% unemployment rate.

In the US and the UK where labour markets are much more flexible, unemployment normally runs at the circa 5% level. Yet in recent years both the UK and the US have experienced some ’softness’ in their labour markets, despite reasonably good growth. (This is different to the chronic difficulties in the 10% unemployment rate countries).

It is here I am mentioning demographics and the comparatively large young cohorts entering the market. In principal this is a good thing, but it is harder to create in the short term the quantity of new jobs you need. In the longer term there is more in-built capacity for growth, if your labour market is efficient.

Switzerland, I’m afraid, is a red herring here. It’s on my hit-list of countries which are getting old too fast. It could easily join the Germany, Japan, Italy group (I think this is the kind of exclusive club one doesn’t want to belong to). All the symptoms are there: interest rates close to zero more or less indefinitely, low growth, weak internal demand etc. Definitely one to watch.

The difference is in labour market flexibility. A properly functioning labour market is able to withstand demographic or immigration shocks of much major magnitude than a slight increase in the number of fresh graduates.

Most European countries suffer from high unemployment and some people think it’s an unescapable destiny. No it is not. It’s wrong policy.

Another low-unemployment country in Europe is Iceland. Pity this great little country is not populous enough to be taken as a serious role model.