The Eurozone 1999-2010 (Some Thoughts about the Long Term Dynamic Forces in the EMU)

Detailed econometric analysis of the dynamics and variability of the 10 different economic variables is used to analyze the divergence-convergence processes in the Eurozone. These data, publicly available from the Eurostat and European Central Bank indicate that the current instability notwithstanding, in its first 11 years of existence the Eurozone was a reasonably cohesive political arrangement. However, significant cracks in its economic façade are clearly developing in the areas most important for the long run economic performances of individual countries – productivity and competitiveness. Unless addressed, these may constitute significant, and perhaps ultimate, threats to the Eurozone cohesion and perhaps to its existence.