EUROPE

Paradigm Shift in the Eurozone? The Market-Based Convergence Rationale

Basic Paper by Simon Tilford, Tony Blair Institute for Global Change and Christian Odendahl, Centre for European Reform.

BY

FORUM NEW ECONOMY

PUBLISHED

1. NOVEMBER 2019

The authors argue that to help cushion economic shocks and prevent members from diverging economically, eurozone capital markets and banks need to be integrated and assets diversified across the eurozone.

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ABOUT EUROPE

KNOWLEDGE BASE

The euro was planned during a period in which economic policy making was driven by a deep belief in market liberalism and the near impossibility of systemic financial crises. This belief has been brought into question since the euro crisis, which showed that panics do happen. New thinking needs to focus on developing mechanisms to protect eurozone countries from such panics and to foster economic convergence between members.

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