ABSTRACT
Supporters of the single currency think that the fundamental cause of the eurozone’s problems is that euroland’s structure is incomplete, as the currency union is not accompanied by correspondingly strong political and fiscal unions. Consequently, the EU institutions draws plans for a deep and genuine economic and monetary union. To assess whether the eurozone can be “fixed” to make it work properly, fundamental questions must be answered:
Can fiscal union supply instruments to improve the competitiveness of member states that are in crisis?
What can increased labour-market flexibility bring?
Will the creation in the EU of real fiscal union prevent the emergence of problems with competitiveness in particular EU countries?
Do the principles formulated for the functioning of the proposed eurozone budget seem feasible in the light of experience with convergence processes and the functioning of fiscal mechanisms within the framework of unified currency zones?
