A positive, non-normative view of the euro zone’s future

The problems reforming the euro zone suggest that in the future, it will be characterised by: Growing heterogeneity between the countries due to divergence between productive specialisations; hard-to-correct divergence between cost competitiveness levels; the absence of a risk-sharing mechanism (whether public or private); Low overall growth under the effect of weak productivity gains and the fact that a significant share of savings is used to finance the rest of the world instead of the euro zone; Tax, social and wage competition between the countries, leading to a sharp reduction in tax on mobile factors of production and to downward pressure on wages and on the generosity of social welfare. While likely, these prospects are hardly encouraging .