For the first time, an official French report has criticised the Euro. Indeed, the latest report of the Council for Economic Analysis (CAE) given to the French government on 23 March, “Economic policy and Growth in Europe” and written by Philippe Aghion, Ã‰lie Cohen and Jean Pisani-Ferry, draws up for the first time a really tough assessment on the single currency and the actions of the Euro zone.
I have no time to comment, as usual, but the report is definitely worth a read (308 pages). Teaser:
“Economic integration has stagnated and no longer promotes growth. The euro’s creation has not produced the knock-on benefits expected. The increase in trade has been relatively modest and financial and credit markets remain segmented. The single currency even seems to have had a “numbing” effect on the EU members, which no longer need to protect against a foreign-exchange crisis and have become complacent in their efforts to control spending and make structural reforms. Moreover, the euro area’s macroeconomic framework has become obsolete. Furthermore, the Lisbon strategy has become bogged down in procedures and has degenerated into rhetoric. This is because it doesn’t have the means to achieve its objectives, since EU-members remain responsible for supply-side policies and the political economy of reform is still mostly national.”
You can find the report here (pdf).