A non-cooperative equilibrium with wage austerity in all euro-zone countries would make no sense

There is reason to fear that a non-cooperative equilibrium may emerge between euro-zone countries , where each country would practice wage austerity (as Germany did from 2000 to 2007 and Spain has done since 2009) to improve its cost competitiveness and gain market shares. At this non-cooperative equilibrium: A euro-zone country gains no competitiveness against the other euro-zone countries since all countries practice wage austerity ; The euro zone gains no competitiveness against the rest of the world since the euro can be expected to appreciate. As is well known, the cooperative equilibrium in the euro zone is one where countries whose cost competitiveness is strong accept faster wage increases and where the countries whose cost competitiveness is weak use wage austerity, without the overall cost competitiveness for the euro zone changing. This equilibrium is not at all practiced currently, since Germany and Italy, which have a competitiveness problem, reject wage austerity and since wages are not rising in Spain and France, where competitiveness is better.