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Ten Years of EMU: Convergence, Divergence and New Policy Priorities

Published online by Cambridge University Press:  26 March 2020

Nikos Christodoulakis
Nikos Christodoulakis*
Affiliation:
Athens University of Economics and Business; Hellenic Observatory, London School of Economics
*
e-mail nchris@aueb.gr or N.Christodoulakis@lse.ac.uk
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Abstract

As the tenth anniversary of EMU is approaching, a debate is underway as to whether the single currency has promoted or hindered convergence among the countries of the Euro Area. On the one hand, there is wide agreement that asymmetric shocks have subsided after the creation of the single currency, but if one moves to examine the catching-up process between the more and less affluent countries of the Euro Area, the evidence is waning. Another worrying development in the Euro Area is the emergence of unprecedented current account deficits in the southern Euro Area countries, while the northern ones enjoy substantial surpluses. To counter these new imbalances, new well-framed policy priorities are required in the Euro Area that put more emphasis on convergence and competitiveness than before.

Keywords

Euro Areaeconomic integrationconvergencebusiness cyclesF15F21F32
Type
Articles
Information
National Institute Economic Review , Volume 208: Ten Years of EMU , April 2009 , pp. 86 - 100
Copyright
Copyright © 2009 National Institute of Economic and Social Research

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Footnotes

∗

The paper was prepared as part of the National Bank Research Fellowship in the Hellenic Observatory, European Institute, LSE. The author is grateful to V. Monastiriotis for extensive comments and suggestions, and also to participants in seminars given in ELIAMEP, Athens, the University of Thessaly, and the Bank of Greece. The usual disclaimer applies.

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