22 Jan 2016

Balance-of-Payments Adjustment in the Eurozone

Stefano Micossi

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Author: Stefano Micossi

Series: CEPS Policy Brief  No of pp: 13

This policy contribution describes the unresolved adjustment problems confronting the eurozone, and places them in historical perspective by comparing developments in key real economic variables under EMU with those observed under the Bretton Woods system. The main finding is that the eurozone is afflicted by a strong deflationary bias and that, therefore, under current trends, deep economic and social strains will continue to project a dark cloud over its future survival.

Stefano Micossi is Director General of ASSONIME, a business association and think tank in Rome, and member of the CEPS Board of Directors. This note has been written for the CEPR project “Rebooting Europe – Step 2”, coordinated by Richard Baldwin and Francesco Giavazzi and is published here with the kind permission of the CEPR.