Among the 2010 Euro Monitor’s key findings:
- Above all – and as a matter of top priority – the European Monetary Union (EMU) needs new sources of sustainable growth if the euro is to remain a truly stable currency. In the medium term, the eurozone would need at least 2% real growth per annum to reduce debt and unemployment substantially. At present, we forecast growth in 2011 of 1.7%.
- Germany and Austria are the best performing economies in the eurozone, scoring Nos. 1 and 2 respectively, while Ireland and Greece bring up the rear.
- Primarily as a result of the economic downturn in 2008/2009, all eurozone countries – except Germany and Malta – have seen their overall measure of balanced growth decline since 2005. Today, none of the 16 countries of the eurozone can claim to be on a fully sustainable path for overall balanced growth. In fact, 13 of the 16 countries are in the mid-level rating group of the Euro Monitor, indicating that the overwhelming majority of eurozone countries is mired at more or less the same overall mediocre performance level. No country – not even Germany – can count itself a top performer in 2010. And Portugal and Spain are especially vulnerable; an economic slowdown could push either country rating down further.
- While most eurozone countries are in roughly the same medium-range position on measures of “fiscal sustainability” as well as “jobs, productivity and resource efficiency”, there remain deep and possibly dangerous divergences in the all-important categories of “competitiveness and domestic demand” and “private and foreign debt”. Cyprus, Malta and Greece do particularly badly on competitiveness and domestic demand, while Greece, Spain, Portugal and Ireland trail on private and foreign debt.