VGK - The Myth Of The Euro: Economic Convergence
The last eight years of euro's 20 years in existence have been a disaster for the thesis of economic convergence - the idea that the common currency is a necessary condition for delivering economic growth to the 'peripheral' euro area economies in the need of 'convergence' with the more advanced economies' levels of economic development.
The chart below plots annual rates of GDP growth for the original eurozone 12 economies, broken into two groups: the more advanced EA8 economies and the so-called Club Med or the 'peripheral' economies.
It is clear from the chart that