Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

Print Print Email Email Share Share Cite Cite
Style: MLA APA Chicago Close

loading...

Stressed Union

by
November 2, 2009

2009.10.26.Eurozone1

The greatest challenge of European monetary union is devising a single monetary policy for a large grouping of countries facing divergent economic conditions. As these charts show, this challenge has been thrust to the fore since 2008, as eurozone employment conditions have diverged dramatically across member countries. Whereas the effectiveness of independent monetary policy as a tool for managing employment in smaller open economies is much debated among economists, the political challenge facing the European Central Bank in having to justify its policy decisions under current conditions is clear.

2009.10.26.Eurozone2

2009.10.26.Eurozone3

Economist: Special Report on the Euro Area
CFR Meeting: The Euro at 10

Post a Comment 1 Comment

  • Posted by Rien Huizer

    Monetary policy may be uniform but it interacts with diverse national fiscal policies, and , especially, diverse financial sector conditions. There are several small countries where the banking system functions poorly, for instance because it is foreign-headquartered, moved into some form of home country state protection and thus less able to take stupid, but necessary risks abroad. Voila.

    And of course, Europe is not at all a homogeneous market. Labor mobility, diverse legal systems, different initial conditions etc.

Post a Comment

CFR seeks to foster civil and informed discussion of foreign policy issues. Opinions expressed on CFR blogs are solely those of the author or commenter, not of CFR, which takes no institutional positions. All comments must abide by CFR's guidelines and will be moderated prior to posting.

* Required