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Forced structural convergence in the eurozone: Or a differentiated European monetary community

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  • Scharpf, Fritz W.

Abstract

Eight years after the onset of the "Great Recession," the eurozone is deeply split between "Northern" EMU economies that seem to be doing reasonably well and "Southern" countries that continue to struggle with socioeconomic catastrophe. This paper argues that the continuing malaise is a consequence of the structural diversity among Northern and Southern economies and of an asymmetrical euro regime that must try to enforce the structural convergence of their political economies. The present regime is vulnerable, however. It may fail economically should its rules have to be relaxed, and it may fail politically should it no longer be possible to suppress North-South conflicts. In light of these risks, the paper concludes by presenting the outline of a differentiated European Currency Community that would accommodate structurally diverse but highly interdependent economies in a flexible two-level regime.

Suggested Citation

  • Scharpf, Fritz W., 2016. "Forced structural convergence in the eurozone: Or a differentiated European monetary community," MPIfG Discussion Paper 16/15, Max Planck Institute for the Study of Societies.
    • Handle: RePEc:zbw:mpifgd:1615
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    Cited by:

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    2. Marta Silva & João Carlos Lopes, 2020. "The structural adjustment of the Portuguese economy in the context of the economic reform of the Eurozone," Working Papers REM 2020/0143, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    3. Costas Lapavitsas, 2019. "Political Economy of the Greek Crisis," Review of Radical Political Economics, Union for Radical Political Economics, vol. 51(1), pages 31-51, March.
    4. Alexoaei Alina Petronela & Robu Raluca Georgiana, 2018. "A theoretical review on the structural convergence issue and the relation to economic development in integration areas," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 12(1), pages 34-44, May.
    5. Donato Di Carlo & Oscar Molina, 2024. "Same same but different? The Mediterranean growth regime and public sector wage-setting before and after the sovereign debt crisis," European Journal of Industrial Relations, , vol. 30(1), pages 31-53, March.
    6. Willi Semmler & Brigitte Young, 2017. "Re-Booting Europe: What kind of Fiscal Union - What kind of Social Union?," Working Papers 1713, New School for Social Research, Department of Economics.
    7. Wilkinson, Michael & Lokdam, Hjalte, 2018. "Law and political economy," LSE Research Online Documents on Economics 87544, London School of Economics and Political Science, LSE Library.
    8. Eckert, Sandra & Lindner, Vincent & Nölke, Andreas, 2020. "EMU reform proposals and their (non) implementation: An overview," SAFE White Paper Series 78, Leibniz Institute for Financial Research SAFE.
    9. V. Sidenko, 2017. "The crisis processes in the EU development: origins and prospects," Economy and Forecasting, Valeriy Heyets, issue 1, pages 7-30.
    10. Mattias Vermeiren, 2017. "One-size-fits-some! Capitalist diversity, sectoral interests and monetary policy in the euro area," Review of International Political Economy, Taylor & Francis Journals, vol. 24(6), pages 929-957, November.

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    Keywords

    Europe; monetary union; structural convergence; democracy; Europa; Währungsunion; strukturelle Konvergenz; Demokratie;
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