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The Big Picture

More Euro Woes Ahead?

The euro has entered its third decade against the backdrop of a global growth slowdown and mushrooming political risks. But should another crisis arise, European policymakers will have plenty of past lessons to draw upon.

In this Big Picture, Lucrezia Reichlin warns of a possible eurozone recession this year, and urges policymakers not to repeat the fiscal mistakes of the last downturn. And Stefan Gerlach reflects on the legacy of quantitative easing in the eurozone, concluding that it was a case of sound economics meeting bad politics.

More broadly, Jeffrey Frankel looks back at the euro's first 20 years, and points to structural flaws underlying its most notable fiscal and monetary policymaking mistakes. But Daniel Gros focuses on the successes, suggesting that the euro will remain a key feature of European integration as long as it remains flexible in the face of newly emerging challenges.

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