Dr. Lorenz Weimann
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In the years since the euro crisis the Euro Monitor had recorded substantial improvements. Since 2012 the average rating for the eurozone has climbed by almost 1.5 points and, at 6.5 points on the scale of one to ten, is now comfortably mid-table. Moreover, there are no longer any eurozone countries in the critical zone (1-4 points). This is not only thanks to the reform efforts undertaken in the former crisis countries, but also due to the wide economic recovery. The Euro Monitor 2016 illustrates that growth alone is no longer enough to boost economic stability in the eurozone.
“With its ultra-loose monetary policy the ECB has bought time to implement reforms, but the window of opportunity has not been sufficiently used. This is particularly striking in the case of the two core eurozone countries, France and Italy,” said Michael Heise, Chief Economist at Allianz. The lingering economic problems failed to jolt them into action. Rather, France and Italy have both lost substantial ground in recent years and have fallen from midfield to the bottom of the table. Indeed, they now lag some way (0.5 points) behind the former crisis countries.
The most recent member states, such as the Baltic economies for instance, perform substantially better. In the overall eurozone ranking, Slovenia and the Slovakia actually come in third and fourth behind Germany in first place and the Netherlands in second.
Heise: “Reducing imbalances is a protracted process requiring discipline and perseverance. But it is the only way to strengthen the eurozone in the long term. It is high time to start a debate on how the eurozone can be rendered crisis-proof in the long term if two of the largest members are dragging their feet on the reform front. Carrying on as before is not an option”.
Highlights of the Euro Monitor 2016:
The average eurozone score for government debt and labor productivity, which is stagnating across the eurozone, came in at 4 points, also still in critical territory.