PARIS – In 2000, shortly after the launch of the euro, I wrote a book arguing that countries adopting the common currency should be forced in one way or another to implement structural reforms. Ten years later, where do we stand?
Surprisingly, the first country to reform was Germany. Thanks to an environment favorable to export-oriented firms and, most notably, to wage discipline, Germany began to post significant balance-of-payment surpluses. This is evident today on a dramatic scale, and is sustaining German economic growth, and one of the lowest unemployment rates in Europe.