A further increase in the euro zone’s heterogeneity is inevitable

The heterogeneity of the euro-zone countries has risen markedly since the subprime crisis. But it is important to understand that this growing heterogeneity was masked from 1999 to 2008 by the increase the peripheral countries’ external debt. In reality, monetary unification inevitably increases the heterogeneity of a currency area’s members, as the elimination of currency risk allows their comparative advantages to be exploited. Even in the United States, for example, with its large-scale federalism, the regions are highly heterogeneous, and much more so than in the euro zone today. Even though progress is being made towards federalism in the euro zone (with the recovery plan, for example), the euro-zone countries’ heterogeneity will therefore increase much more: it must be accepted that in the long term, the euro zone will be a blend of rich regions and poor regions, whatever the efforts made to prevent this.