Agnès Bénassy-Quéré, Antoine Berthou & Lionel Fontagné
"Euro: as Expected, Gains and Costs"
La Lettre du CEPII N°284, December 2008, CEPII.
Ten years ago, eleven European countries, since joined by five others, gave up their national currencies to create the euro. This anniversary is the occasion to evaluate whether the promises regarding the euro were kept. Various studies undertaken on French exports indicate that the single currency indeed produced the expected microeconomic benefits of a reduction in the transaction costs and greater price transparency. However, the single currency policy has led to strong divergences of real interest rates between countries, whose effects have not been corrected for lack of suitable macroeconomic co-operation. Ten years after the creation of the euro, the bursting of the real estate bubble in certain countries of the zone and the consequences of the financial crisis point to the necessity of strongly counter cyclical macroeconomic policies in the monetary union.