The euro was supposed to facilitate economic convergence between the countries using it and foster the development of a stronger ‘European’ identity. Philippe Legrain argues that the reverse is now happening. European policy-makers are mostly to blame, because of their attempt to create a Germanic and technocratic eurozone. They have damaged the currency union by failing to address the root causes of the crisis. And by further constraining governments’ scope to respond to democratic pressures, they have eroded the legitimacy of both national and EU institutions. The eurozone needs to change direction. So long as a fiscally federal eurozone remains out of reach, governments should work towards a flexible one comprising a genuine banking union, a reformed ECB and greater fiscal flexibility for governments.
My new pamphlet for the Centre for European Reform