In a currency area, countries naturally resort to non-cooperative policies

The removal of the ability to use the exchange rate encourages the countries of a currency area (we use the euro zone as an example) to use non-cooperative policies instead : Internal deva luations (reduction in labour costs); Fiscal devaluation s (tax cuts to improve competitiveness or attract investments); High fiscal deficits, which are easier to maintain thanks to the existence of the single currency. This is an argument for coordinating wage, tax and fiscal policies, which , in the euro zone, is hardly done at all - and very poorly at tha t .