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
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