5 - Sustainability and Eurozone 2.0

Summary

The late 2000s Eurozone crisis has constituted the cause for an extensive overhaul of the EU’s, and primarily the Eurozone’s, modus operandi. The modifications introduced include reinforced budgetary discipline and enhanced fiscal surveillance framework, but also substantial delegation of decision-making authority from the national to the supranational level. The changes are so extensive that this could be described as a fourth stage of economic and monetary union, or a Eurozone 2.0. The aim of the adopted measures has been argued to be a more economically sustainable development. This chapter analyses whether this has been the case. Have these measures created a more sustainable economic environment? Of particular interest is the criticism that the Eurozone suffers from severe socio-economic and cultural imbalances that render the entire project unsustainable. It is found that the changes introduced into the EU framework during the crisis have attempted to create a more cohesive and integrated Eurozone/EU, both economically and politically, but that it is highly doubtful whether such changes promote an efficient and sustainable model of economic governance.