Our Forum addresses the 20th anivesary of the Euro and asks what needs to be done, to secure its future.
Marco Buti, Maya Jollès and Matteo Salto open this issue with a reflection on what the EMU has achieved over the course of the last 20 years, the initial objectives set out for the euro and how they have changed over time. A pivotal point of the euro's nascent history was the global financial crisis of 2008 and the shockwaves that followed. Why wasn’t the architecture of the EMU better prepared to handle this crisis, asks Daniel Gros. After all, the euro area should have been better able to cope than the US because there were fewer sub-prime mortgages in Europe. Lorenzo Bini Smaghi and Michala Marcussen look at ways to break the sovereign-bank doom loop and create a safe asset in preparation for a future crisis.
The euro at 20 looks frail, says Thomas Mayer. He proposes a ‘New Deal’ between the heavily indebted southern and less indebted northern countries to put the euro back on its feet. Adalbert Winkler is also sceptical and warns of the euro's vulnerability to regional crises, "as national(istic) politics might scapegoat integration, when the problem is actually a lack of integration." To conclude our Forum, Harold James provides a comprehensive overview of the current challenges facing the euro and weighs the best options for addressing them, such as initiatives and multilateral institutions.
To the Forum