Dáil Éireann Debate, Tuesday - 17 June 2014
176. Deputy Colm Keaveney asked the Minister for Finance his views on whether the eurozone is an optimal currency area; if there are criteria that make for an optimal currency area in which he believes the eurozone is deficient; the actions he believes necessary to address those deficiencies; and if he will make a statement on the matter. [25859/14]
View answerThe main objective of the single currency is to enhance the living standards of the citizens of all participating Member States. This is achieved inter alia by greater levels of trade, a deepening of the Single Market and increased financial integration within the EU, all of which are facilitated by the single currency.
While it is fair to say that the euro has been optimal in this regard, it is not to say deficiencies have not become evident in recent years. Perhaps the most obvious example of these is the negative impact of spillover effects resulting from inappropriate policies in some Member States affecting other Member States. A number of important institutional and governance reforms have been implemented in recent years which are addressing these difficulties. These include the six-pack, two-pack and the European Semester. All of these reforms are designed to ensure that Member States implement appropriate and sustainable economic and fiscal policies that take into account the euro area dimension. In addition, steps are being taken to create a safer and sounder financial sector by deepening the integration of the banking system through the creation of the Banking Union.
This retro-fitting of the monetary union with the tools to make it commensurate with an economic union is a positive development and I would not understate the importance of the improvements that have been made. Having said that, it will clearly take some time for these reforms to fully bear fruit.
