Imbalances in the development of European currency integration: key issues and recent trends

Cover Page

Cite item


The recent financial and sovereign debt crises affected the Eurozone countries in different ways. The centre-periphery divide of the national economies exacerbated existing problems in the euro area. In this article an empirical analysis of the development of intra-European imbalances is provided. The analysis shows that the problem of internal imbalances remains unsolved. High unemployment and high public debt in Eurozone’s periphery reflects the internal imbalances. In some Northern countries the public debt ratios are becoming higher, too. Significant current account imbalances provide an important indicator of external imbalances. The co-existence of large current account surpluses in Germany and the Netherlands and deficits in Greece challenges the possibilities of deeper European integration. The provided analysis shows a reduction in external imbalances because of better performance of periphery current accounts. A real solution of European problems needs deeper macroeconomic policy cooperation between national authorities and European institutions. The article highlights the limits of European institutions in promoting common economic policy. It is necessary to boost competitiveness by coordinated structural reforms in the euro area; fiscal austerity policies are not enough to restore pre-crisis internal balance. For sustainable economic growth European investment projects should be implemented in the euro area. The recovery of national economies should be used to reduce the high public debt levels in both centre and periphery countries. In the absence of economic adjustment through the exchange rate in the euro area further improvement in European current accounts convergence is important for European economic integration.

About the authors

Cornelia Sahling

Peoples’ Friendship University of Russia (RUDN University)

Author for correspondence.
Moscow, Russia


  1. Andronova, I. V. (2010). Foreign Economic Security of the Russian Federation: Theory and practice. Moscow: Kvadriga. (In Russ.).
  2. Blundell-Wignall, A. (2011). Solving the Financial and Sovereign Debt Crisis in Europe. OECD Journal: Financial Markets Trends, 2, 201—224.
  3. Butorina, O.V. (2012). Causes and Consequences of the Crisis in the Eurozone. Voprosy ekonomiki, 12, 98—115. (In Russ.).
  4. Canofari, P., Esposito, P., Messori, M., & Milani, C. (2015). In search of a new equilibrium. Economic imbalances in the Eurozone. Roma: Edizioni Nuova Cultura.
  5. Gros, D. (2015). The Eurozone crisis as a sudden stop: It is the foreign debt which matters? URL: (accessed 15.05.2016).
  6. Khmelnitskiy, M. M. (2013). The European Union North-South divide and the future of the Euro. Vestnik MGIMO-Universiteta, 6, 134—140. (In Russ.).
  7. Meshcheryakova, O. M. (2014). Financial Policy of The European Union and European Financial Stability Facility. Sovremennoe pravo, 10, 121—123. (In Russ.).
  8. Sanchez, J. L. D., & Varoudakis A. (2014). Tacking the causes of Eurozone external imbalances: New evidence, URL: (accessed 15.05.2016).
  9. Seriogina, S. F., & Larionova, M. L. (2012). European Debt Crisis and New Lines of EU Economic Policy Reforms. Rossiiskii ekonomicheskii zhurnal, 6, 68—94. (In Russ.).
  10. Sinn, H.-W. (2014a). Austerity, growth and inflation: Remarks on the Eurozone’s unresolved competitiveness problem. The World Economy, 37 (1), 01—13.
  11. Sinn, H.-W. (2014b). The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs. Oxford University Press.
  12. Thimann, Ch. (2015). The Microeconomic Dimensions of the Eurozone Crisis and Why European Politics Cannot Solve Them. Journal of Economic Perspectives, 29 (3), 141—164.
  13. Trichet, J.-C. (2011). Competitiveness and the smooth functioning of EMU. Lecture at the University of Liège. 23 February 2011.
  14. Wood, R. (2014). Eurozone macroeconomic framework: Reducing internal and external imbalances. MPRA Paper 53569. URL: (accessed 18.05.2016).
  15. Zimarin, K. A. (2013). European Union: Creating a common financial system. Problemy teorii i praktiki upravleniya, 1, 65—70.

Copyright (c) 2017 Sahling C.

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

This website uses cookies

You consent to our cookies if you continue to use our website.

About Cookies