The illusion of an independent national currency


Since the introduction of the euro, Slovakia’s per capita GDP has almost closed the gap to the Czech Republic, which chose to keep its own currency.

As Europe heads towards another showdown on Greece over the issue of policy reforms versus debt forgiveness, the broader debate about the durability of the Eurozone is right around the corner. The critics will be back in the headlines, claiming that it was a mistake to give up independent monetary and exchange rate policies to join the common currency without a fiscal transfer system in place.

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