Giuseppe Bertola writes:
Just as the Eurozone countries began to enjoy full and irreversible
economic integration, inequality increased very sharply in the EU15 and
more sharply in the 12 Eurozone countries, bringing its previous
decline to an end and reverting to the 1996 level by 2004…one finds that EMU does appear to improve economic performance (both in
terms of per capita income and in terms of unemployment) and the
intensity of international transactions (especially as regards foreign
direct investment flows). But it also appears to be associated with
higher inequality, and with lower social spending. Interestingly, the
inequality variation associated with EMU is fully accounted for by
changes in social policy expenditure (excluding pensions) as a share of
GDP, and in GDP and unemployment (both of which are of course likely to
be influenced by integration policies, as well as by global cyclical
and technological development).
We will of course see how far this trend goes, but it is consistent with my view that Europe will, in economic terms, become like the United States more rapidly than vice versa.