Economic, Fiscal and Financial Governance in the Euro Area

Jean Claude Trichet, former chief of European Central Bank reviews the experiences so far in Euro area.

He says we need to be a bit more patient with Euroarea. It s hardly as bad as people make it out to be:

1. Contrary to many negative predictions, the euro, as a currency, is a remarkable success in terms of credibility, stability and resilience. This resilience is due, in particular, to a large popular support.
2. The euro area is more of a success in terms of real growth measured during the period starting from its inception until today. But the appreciation must be more nuanced as regards nominal and real convergence inside the single currency area.
3. In a medium- and long-term perspective, EMU calls for further significant reinforcing its economic, fiscal and financial governance.
4. Drawing a number of lessons from the crisis, the ECB actively participated in what I call “conceptual convergence” of policy making in advanced economies’ central banks.

Overall, the success of the euro and of the euro area in terms of credibility,resilience, flexibility, popular support and real growth during its first 20 years is
impressive. It justifies reasonable optimism as regards the long-term success of this unique, ambitious, historic endeavor of the Europeans.

To consolidate this long-term success, a lot of hard work remains to be done as is always the case when a bold historic endeavor is in the making. The single market with a single currency of the U.S. was not  achieved in a short span of time. Neither in 20 years, nor even in 40 years! From the Coinage Act of 1792 to the Federal Reserve Act of 1913, there is a maturing process of around 120 years. And since the issuance of the first federal note in 1914 and today, an
additional period of 105 years.

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