25 Years On, the Euro Has Failed to Deliver on Economic Promises But Creeping Federalism Sustains It
• The euro was meant to energize Europe's economy, but 25 years on it has failed to deliver on its economic promises. Eurozone GDP per capita is lower now than when the euro launched.
• The euro has made it harder for countries to leave the EU and rebuilt monetary sovereignty. It has also brought some benefits like reduced exchange rate variability.
• To survive, the eurozone has slowly moved towards fiscal integration despite political opposition. This creeping federalism was the original ambition.
• Denying currency realignment flexibility has entrenched economic rigidities. This has led to punishing austerity and stagnation across much of the eurozone.
• Once an acute crisis for the eurozone, lack of growth has now become a chronic condition with no immediate prospect of cure.