by Brian Hayes MEP, Member of the Economic Committee of the European Parliament
Eight years after the onset of the financial crisis and despite having come through it, the Eurozone still faces enormous economic problems as unemployment is still too high and growth too low. But presuming that the Eurozone is doomed to constant failure is presuming a lot.
Who knows where the Eurozone will be in five or ten years’ time? There are currently 19 Member States within it and nine outside. Seven of the nine countries on the outside have expressed a willingness to join at some time in the future. Having more Eurozone members will increase economic stability, and with a more co-ordinated currency union the EU’s internal market will work more efficiently. Additionally, those countries that do adopt the euro have to comply with prudent and sensible budgetary rules such as keeping debt to 60% of GDP and having deficits of less than 3%. Of course, for candidate countries, the Eurozone does not look attractive at the moment but the long-term growth potential is obvious.
One thing is absolute – a firm determination on the part of the Eurozone countries, having redesigned the rules and retrofitted the currency, to make the euro work. As the president of the European Central Bank Mario Draghi said recently, people only want to join something or stay in something if they see a benefit in it. Benefits must be understood by ordinary people. And that’s where the entire question of the future of the Eurozone is closely linked to reform of the EU itself. People have to see a clear link between increased integration and increased prosperity. Keeping the euro strong demands a new approach across the euro area. Rules, which were blatantly ignored before under the Growth and Stability Pact, must now be fully implemented.