The introduction of the euro was meant to make its members richer, now a new study suggests that might not be the case.
has shown in stark terms how damaging the introduction of the euro has been for many European Union countries.The study looks at whether on balance the euro has led to an increase or a fall in prosperity. It does this by looking at historical trends in gross domestic product per head of population before and after countries joined the Euro.
Other than Germany, only the Netherlands showed significant benefits, gaining more than $392 billion or $23,792 GDP per capita. According to the report, France saw a drop in its prosperity by more than $4.08 trillion and as much as $4.87 trillion in Italy. Both countries the report highlights would have done significantly better had they not joined the Eurozone.
The introduction of the euro artificially resulted in the depreciation of the Deutschmark - which as German businesses quickly discovered gave them a competitive edge, something they would not otherwise have had.estimated that the introduction of the euro could have distorted the German currency by as much as six percent.
“Many policymakers are blinded by export success and vested interests of German export industries. They trust in ‘laissez-faire’ and ‘no activism’ advice, in contrast to concerns from the European Commission and the IMF. In this sense, there exists a time-bomb for the cohesion of the Euro area,” he stated., is as big now as it was in 1999.
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