The future of the Euro: agreements to disagree and prospective scenarios from the 2014 Vienna debate

The policies of the European Central Bank and a series of reforms have stabilized the Euro area. However, further systematic reforms are necessary for the long-term viability of the Euro. At the same time, the limited legitimacy of many crisis-induced measures and their asymmetric conse-quences in terms of growth and employment across the Euro area make unanimous agreement on systematic reforms difficult. This keeps the Euro area vulnerable to economic and political shocks that may yet force either its systematic reform or break-up. The 2014 Vienna debate on the future of Euro has revealed some agreement on reforms that could make the heterogeneous Euro area viable over the long-term, as well as two fundamental disagreements on the political feasibility of such reforms and on the consequences of (openly discussing the) reintroduction of differentiated macroeconomic policies within the Euro area. Possibly, these disagreements could be reconciled when formulating a policy recommendation for moving ahead: the Euro area needs to focus on minimizing the reform agenda in order to maximize the political chances of its adoption while also exploring unorthodox strategies and break-up scenarios in such a way that would not trigger a self-fulfilling crisis. This would provide the Euro area with a realistically designed 'Plan A', but also a better idea of a 'Plan Z' that could guide its actions in case joint responses get overwhelmed by the next bout of crisis.