The eurozone´s central bank last week used an unusually strong wording to assess the convergence progress among member states of the monetary bloc. According to the central bankers, early adopters of the euro (the original 11 members plus Greece, which joined them in 2001, before the introduction of euro coins and banknotes) show disappointing levels of convergence. The bank was especially harsh towards Southern countries, especially Greece and Italy. Southern members benefitted largely from the short-term effects of the newly-nascent eurozone in terms of borrowing costs, but failed to profit from these to introduce structural reforms. Economies in the south remain rigid and protectionistic and, in the cases of Greece and Italy, even show divergence from their higher-income monetary union partners. Spain and Portugal seem to not have moved from their relative position vis-a-vis the Northern countries. In contrast, though, some of the new eurozone countries (Estonia, Latvia, Lithuania and Slovakia), show the highest levels of convergence inside the monetary bloc.

This ECB publication follows a high-level plan to finish the monetary union proposed by the 5 EU presidents and some proposals of other high-level figures to take a further step ahead in fiscal integration in the eurozone.

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