Daily Archives: May 18, 2010

The first 11 years of the euro have exposed several flaws in the design of Europe’s monetary union.  One is the fact that, contrary to expectations, the experience of sharing a common currency with advanced, northern European economies did not spur but held back structural reform in weaker, southern member-states.  Another was the ineffectiveness of the stability and growth pact, the eurozone’s so-called fiscal rulebook.  In a nutshell, too many governments ran up large budget deficits and didn’t bother to cut public debt when they felt like it – and this, by the way, includes Germany, the self-styled paragon of fiscal discipline, under former chancellor Gerhard Schröder. Read more