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Thursday, May 28, 2020

EUROZONE: Keeping the promise of eurozone convergence – by Philip Heimberger, Maximilian Krahé, Dominic Ponattu and Jens van 't Klooster

Covid-19 is first of all a health crisis. Its economic consequences, however, are no less severe. Given the pandemic’s uneven progression across Europe, unequal fiscal starting points geographically and this month’s ruling by the German constitutional court, the coming months and years will put the eurozone to the test once more.

In its current architecture, the eurozone is a web of glass—superficially stable, but brittle when subject to shocks. To avoid a break-up and render it resilient for the long term, the sources of this fragility must be identified and remedied.

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Keeping the promise of eurozone convergence – Philip Heimberger, Maximilian Krahé, Dominic Ponattu and Jens van 't Klooster