political climate would be like if unemployment had been rising almost continually for the last five years, and if the rate was well into double-digits for the country as a whole. GDP was 8 percent below its precrisis level in Ireland, 9 percent below in Italy, and 12 percent below in Greece.'įor American readers, try to imagine what the U.S. As O'Rourke writes: 'In December 2013 euro area GDP was still 3 percent lower than in the first quarter of 2008, in stark contrast with the United States, where GDP was 6 percent higher. recession, and the a follow-up period of negative growth from early 2011 to early 2013. Notice that the European Union and the euro zone actually had two recessions: the Great Recession that was deeper than the U.S. Here's the quarterly growth rate of GDP for the 17 euro countries, for all 28 countries in the European Union, and with the U.S. But Greece has unemployment of 27.8% Spain, 25.8% and Croatia, Cyprus, and Portugal all have unemployment rates above 15%.

And remember, this average include countries with low unemployment rates: for example, Germany's unemployment rate has plummeted to 5.1%. In the euro zone, unemployment across countries averaged 7.5% before the Great Recession, and has risen since then to more than 11.5%. economy, we agonize (and rightfully so!) over how slowly the unemployment rate has fallen from its peak of 10% in October 2009 to 6.6% in January 2014. Here's the path of unemployment in Europe through the end of 2013, with the average for all 28 countries of the European Union shown by the black line, and the average for the 17 countries using the euro shown by the blue line. To understand where O'Rourke is coming from, start with some basic statistics on unemployment and growth in the euro-zone. If the euro is eventually abandoned, my prediction is that historians 50 years from now will wonder how it ever came to be introduced in the first place. Whichever way we jump, we have to do so democratically, and there is no sense in waiting forever. But if a crisis is inevitable then it is best to get on with it, while centrists and Europhiles are still in charge. The demise of the euro would be a major crisis, no doubt about it. But I was especially drawn to ' Whither the Euro?' by Kevin Hjortshøj O’Rourke, because he finds himself driven to contemplating whether the euro will survive. Reza Moghadam discusses how Europe has moved toward greater integration over time, Nicolas Véron looks at plans and prospects for a European banking union, and Helge Berger and Martin SchindlerĬonsider the policy agenda for reducing unemployment and spurring growth. Finance and Development, published by the IMF, offers four angles on Europe's road in its March 2014 issue. But the economic situation surrounding the euro remains grim and unresolved. For the last few months, the euro situation has not been a crisis that dominates headlines.

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