The first 20 years of the euro were very different from what had been anticipated. Deflation, rather than inflation became a problem. Financial markets, which had been neglected, became a major source of instability. However, the euro area proved resilient and support for the euro is at historic highs. Looking to the future, the greatest danger might not be another financial crisis, but sluggish growth and an increasing gulf between countries that have successfully adjusted their public finances and those where this goal remains increasingly distant. This document was provided by Policy Department A at the request of the Committee on Economic and Monetary Affairs.
This project was awarded under the Framework Service Contract for the provision of external expertise in the field of monetary and economic affairs (Monetary dialogues) (IP/A/ECONMD/FWC/2014-026/C6) with the European Parliament. The full list of CEPS’ Framework Contracts is available here.