That is why I believe that these countries and the eurozone more generally would benefit from euro depreciation. Although a weaker euro would not increase their competitiveness relative to Germany and other eurozone countries, it would improve their competitiveness relative to all non eurozone countries.

The first option would be to progress de facto toward a two speed EU without establishing further legal commitments. Eurozone countries, together with others willing to join the euro in the future (the eurozone plus ), could simply decide to use the legal means already available to increase cooperation.

One way to overcome the dilemma might be to articulate an institutional future in which there would be essentially just two types of countries within the EU and the single market those in the eurozone and those with national currencies. There would have to be two sets of EU institutions, one for the eurozone and another for non eurozone countries, although they would overlap.

Euro area

A Euro Sabbatical

It contains many more countries than those that use the euro. As useful as the euro could be for Europe s prosperity if its obvious flaws were corrected, the way that the eurozone is now developing will split the EU and undermine the idea of unity in diversity.

Does Europe Have a Korean Option?

The Eurozone s Strength in Disunity

One could argue that the euro has been and still is overvalued, and that this has hindered many eurozone economies productivity relative to non eurozone countries. But the relative productivity deficiencies within the eurozone are more important for growth, and have nothing to do with the exchange rate.

Scotching the Eurozone

Optimizing the Eurozone

That is where the eurozone is today. A debt crisis that erupted in Greece, the eurozone s outer periphery, has migrated with a vengeance towards the core, so much so that the survival of the eurozone itself is at stake.

Most notably, eurozone countries have faced powerful asymmetric shocks, to which their lack of independent monetary policy instruments made it virtually impossible to respond. As a result, they have struggled with recurring economic crisis.

Down with the Eurozone

Judgment Day for the Eurozone

London vs. the Eurozone

We have compared the performance of the best performing and worst performing euro zone countries between 1999 and 2009. To avoid comparing apples and oranges, we have compared the data for the 11 countries that were included in the first wave in 1999, supplemented by Greece, which joined shortly thereafter.

In addition, since 2001, the European Commission has had a programme of national and regional cooperation with six Central American countries, totalling 655 million euros.

Because individual eurozone members have no monetary policy tools at their disposal, the only way that Germany can reduce its surplus while remaining in the eurozone is to conduct expansionary fiscal policy. The economist Stefan Kawalec has explicitly referred to the current policy mix in the eurozone as currency manipulation.

Such are the EMU s benefits that the visible costs of remaining a non member are beginning to recast the political debate surrounding euro adoption in several countries. 160

Such are the EMU s benefits that the visible costs of remaining a non member are beginning to recast the political debate surrounding euro adoption in several countries.

Europe is our number one priority stabilizing the eurozone and resolving its current crisis are essential to stability and economic recovery in France.

Demokratisasi di Eurozone

A Survival Strategy for the Eurozone

Back to the Brink for the Eurozone?

Golden Rules for the Eurozone

Rebalancing the Eurozone

The Eurozone s Strategy of Pain

The new rates are effective from the school year in progress on 1 January 2005. The currency areas where increases were approved are as follows Austria (euro), Belgium (euro), Denmark (krone), France (euro), Germany (euro), Ireland (euro), Italy (euro), Japan (yen), Netherlands (euro), Spain (euro), Sweden (krona), Switzerland (Swiss franc), United Kingdom (pound sterling), United States dollar in the United States and the United States dollar outside the United States.

If southern eurozone countries followed the route of forging a new social deal, they would have to ensure that it ultimately intersects with the paths of the northern European members. While all eurozone countries do not have to converge on a single model, their interdependence means that a pan European social and economic settlement is needed.

Leaving the common currency would, of course, threaten collateral damage for the exiting country and raise the risk of contagion for other weak eurozone members. The balance sheet effects on euro debts caused by the depreciation of the new national currency would thus have to be handled through an orderly and negotiated conversion of euro liabilities into the new national currencies.

Risks that emerge in one country can affect the entire currency area. Common banking supervision is needed for strengthening confidence among countries using common financial backstops.

For example, a developed country government contributed 1 million Euros to support development of a Regional Center.

In the first stage, beginning in the spring of 2008, the locus of the North Atlantic crisis moved from the United States to the eurozone. Banks in the eurozone came under pressure, and interbank tensions increased.

Germany and the other countries of the eurozone core are signaling that debt mutualization within the monetary union is out of the question, and that bailouts of countries or financial institutions will be balanced by bail ins of their creditors. Increased uncertainty concerning the safety of deposits will push up interest rates and deepen Europe s recession, and may also trigger capital outflows from the eurozone s weaker peripheral economies to the core.

At home, Merkel recently sent out a clear message to her critics that Germany must pay a price for eurozone leadership. She cautioned her colleagues against loose talk about a Grexit Greece s exit from the eurozone and assured visiting Greek Prime Minister Antonis Samaras that Germany remained committed to his country s membership of the eurozone.

Adopting a stronger currency (as in euroization ) is neither difficult nor particularly unusual. Introducing a new, weaker national currency to substitute for a stronger one in times of financial distress is an altogether different matter, about which most economists know almost nothing.

The more French president Nicolas Sarkozy attacks the European Central Bank and the strong euro, the more he is criticized in the European media, by European finance ministers, European Union officials and the ECB itself. The critics are right.

But allowing Greece to default and still remain in the eurozone is not an option it would signal that other eurozone countries could amass huge debts, funded by the ECB, without having any intention of repaying. Fiscal responsibility in the eurozone would be fatally undermined.

The Government the Eurozone Deserves

The Eurozone s False Recovery

Signs of Life in the Eurozone

Growing Up in the Eurozone

Poland s Eurozone Tests

A Standby Program for the Eurozone