In reality, the United States is a more fragile economy than the euro zone

The euro zone’s structural problems (heterogeneity of its member countries, lack of a risk-sharing mechanism, major difficulty correcting cost competitiveness disadvantages , end of capital flows between countries) are a frequent topic of discussion . But in the event of shocks and cyclical slowdowns, the United States is actually more fragile than the euro zone, due to: The extent of the wealth effect; Reinforced during recession s by the fact that because US companies stop issuing bonds, they have to stop buying back their shares; The s mall size of cyclical stabilisers; The need to attract capital from the rest of the world to finance the external deficit, leading to the risk of a balance-of-payments crisis if this capital stops flowing to the United States.