24 Jan 2019

Twenty years of the euro

Resilience in the face of unexpected challenges

Daniel Gros / Cinzia Alcidi

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.

Prepared at the request of the European Parliament’s Committee on Economic and Monetary Affairs for the Monetary Dialogue of January 2019, this briefing is available here.