It also one that’s not likely to get resolved soon:
It is possibly also true that the euro has made it marginally easier to conduct business between eurozone states. Companies and individuals no longer have to worry about exchange rate risk, and can plan for the future accordingly. Yet the major efficiency gains anticipated by European industry from pricing policies and financial strategies have failed to materialise.
Nor do the exaggerated claims around price stability bear much scrutiny. The eurozone’s aggregated inflation rate disguises big variations on the ground. A year ago, for instance, the inflation rate ranged from 6.7pc in Spain through 11.3pc in Germany to 21.7pc in Latvia.
Even today, with the generalised price surge now receding, the differences are extreme, ranging from minus 0.7pc in Belgium to 6.9pc in Slovakia.
Despite 25 years of monetary integration, inflationary experience across the eurozone remains very different. In terms of interest rates, it is very much still the case that what may be appropriate for one country is likely to be inappropriate for another.
It’s absolutrely true that there are benefits to having the same curreny. Also that there are costs. Ths more different the component parts of the currency area the greater those costs. This is why the theory in this area is about optimal currency areas. What’s the right size where those costs and benefits match off against each other?
The answer is that Europe’s far, far, too large. But then everyone sensible’s known that since the 1990s.