Is The Eurozone (And The EU) Really Worth It?

February 07, 2014
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Excel Sheet

Latvia became the 18th member of the Eurozone at the beginning of 2014 and only the fourth post-communistic country to do so. Despite the difficult period of the last four years and the bailouts of Greece, Portugal, or Cyprus, the Euro project seems to be a successful exercise for most Eurozone members, based on the key macroeconomic numbers at least.

Since 1999 when most Eurozone members entered the common currency, the GDP per capita in the Eurozone-economies has increased by 62-95% in USD-terms. That is more than in the USA (53%), UK (51%), or Japan (16%). In addition, the indebtedness of most Eurozone members (measured by their public debt to GDP) have increased less than those of the USA, Japan and UK.

Whatever criticism the common currency creates (rightly or not), the overall numbers do not look that bad.

When looking at the project of the European Union as such, the numbers look even more impressive for the new entrants. The countries, which entered the EU in 2004 have increased their GDP per capita by 52-186% in between 2003-2013 in USD terms, based on the IMF estimates. That is a growth twice as much faster than the average in the EU