The euro at 20: A concise critical assessment

30-01-2019

Eurozone monetary governance was framed for a stable macroeconomic environment. While the ECB policy framework changed much after the global financial crisis, this did not prevent important nominal divergences. These ones prove the importance of non-monetary factors affecting relative nominal prices, such as fiscal policy and labor market institutions. New tools are necessary to limit these nominal divergences, otherwise real divergence will continue to weaken the euro. This document was provided by Policy Department A at the request of the Committee on Economic and Monetary Affairs.

Eurozone monetary governance was framed for a stable macroeconomic environment. While the ECB policy framework changed much after the global financial crisis, this did not prevent important nominal divergences. These ones prove the importance of non-monetary factors affecting relative nominal prices, such as fiscal policy and labor market institutions. New tools are necessary to limit these nominal divergences, otherwise real divergence will continue to weaken the euro. This document was provided by Policy Department A at the request of the Committee on Economic and Monetary Affairs.

Externí autor

Christophe BLOT, Jérôme CREEL and Xavier RAGOT