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Democracy or Euro: who will surrender?


  • A. Lanzavecchia


  • E. Pavarani



This article offers insights into the Eurozone, one of the most challenging experiments towards market and political integration through a single monetary unit - namely Euro. However, whereas markets might be fully integrated even without a common European currency, Euro and its functional institutions are shrinking sovereignty within member states. Today the Eurozone records the lowest percentage of growth in the world; it is an island of stagnation, deflation and high unemployment rate. Six years after the beginning of the crisis, most of the European countries have not yet recovered the value of GDP recorded in 2008. Dani Rodrik’s trilemma states that democracy, national sovereignty and global economic integration are mutually incompatible. Yet, the European Union is even shrinking both democracy and national sovereignty towards a global economic integration. Consequently, either democracy shall raise and abort such political project or Euro will shrink democracy to village governance level only.

Suggested Citation

  • A. Lanzavecchia & E. Pavarani, 2015. "Democracy or Euro: who will surrender?," Economics Department Working Papers 2015-EF02, Department of Economics, Parma University (Italy).
  • Handle: RePEc:par:dipeco:2015-ef02

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    1. Alberto Bagnai & Christian Alexander Mongeau Ospina, 2014. "The impact of an exchange rate realignment on the trade balance: Euro vs. national currency - Some preliminary results with a/simmetrie model of the Italian economy," a/ Policy Briefs Series 1401, Italian Association for the Study of Economic Asymmetries, Rome (Italy).
    2. Lars Jonung & Eoin Drea, 2009. "The euro: It can't happen, It's a bad idea, It won't last. US economists on the EMU, 1989-2002," European Economy - Economic Papers 2008 - 2015 395, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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