First decade defeats of Euro

Although the overall performance in the first decade of Euro has been impressive, yet all is not hunky-dory. According to an estimate by the EC, on an average ,real per capita GDP grew at meager 1.6% between 1999 and 2008,down from 1.9% between 1989 and 1998 and well below the 2.2% in Denmark, Sweden and the UK,the three established members of EU who are outside the Eurozone.Though the performance in the employment front has been splendid, productivity growth observed in the us over the same period .moreover ,there have been sharp divergences across countries in terms of inflation and unit labor costs. This has resulted in weakening competitiveness and hefty external imbalances, which in EMU requite long periods of adjustment. The obvious conclusion, then, is that although the Euro zone is a triumph as a monetary union, yet the economic leg of it has not developed much. At the very least, its creation has not caused the acceleration in dynamism that proponents hoped for.

Moreover globalization further compels the Euro area to take an effective role in global economic and financial governance. Food and energy prices are on the rise, spurred by the fast growth of the global economy and changing consumption patterns in emerging impact.