In 1992, the decision to begin the long journey to European monetary union began, with the euro’s physical coins and banknotes being introduced into general circulation a decade later. This report discusses the future of the euro following a near quarter of a century of experience with Economic and Monetary Union (EMU). Has the eurozone lived up to its expectations? How effective have the steps been taken to stabilise the eurozone? What are some of the basic scenarios we can imagine for the euro until the end of this decade? What combination of circumstances could lead to a country’s exit from the euro and how conceivable would that be?
These questions are still highly relevant, especially considering that public debates have been full of assumptions about the eurozone suffering from design flaws, falling apart or, positively, actually resulting in major economic and political gains. Moreover, while the current conditions in the eurozone do look worrying with high inflation, high debts and disappointing growth figures, 2023 is also the year that the negotiations on the reform of the Stability and Growth Pact have to be finalised. Are these negotiations moving in the right direction of what we would identify as the essential governance package for the eurozone or will economic governance remain a process of incremental change with little direction?
Now, more than 30 years since the decision in Maastricht to go for EMU, we were asked to analyse these profound questions head on by the Vice Chair of the European Parliament’s Committee on Economic and Monetary Affairs, Michiel Hoogeveen, and the Chair of the Committee on Budgets, Johan van Overtveldt. Both belong to the ECR Group.