Democracy or Euro: who will surrender?

Alberto Lanzavecchia () and E. Pavarani ()

No 2015-EF02, Economics Department Working Papers from Department of Economics, Parma University (Italy)

Abstract: This article offers insights into the Eurozone, one of the most challenging experiments towards market and political integration through a single monetary unit - namely Euro. However, whereas markets might be fully integrated even without a common European currency, Euro and its functional institutions are shrinking sovereignty within member states. Today the Eurozone records the lowest percentage of growth in the world; it is an island of stagnation, deflation and high unemployment rate. Six years after the beginning of the crisis, most of the European countries have not yet recovered the value of GDP recorded in 2008. Dani Rodrik’s trilemma states that democracy, national sovereignty and global economic integration are mutually incompatible. Yet, the European Union is even shrinking both democracy and national sovereignty towards a global economic integration. Consequently, either democracy shall raise and abort such political project or Euro will shrink democracy to village governance level only.

Pages: 13 pages
Date: 2015
New Economics Papers: this item is included in nep-pke
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