The Future of the Eurozone: A Reflection Paper on the North/South Divide

There is now a wide agreement that reforms of the architecture of the Eurozone (EZ) are needed, reforms aimed at fostering further integration of economic policy and governance. Behind the plea for “more Europe”, divergences loom large across member states. The cleavage is normally represented in geographic mode, the Northern EZ countries (NEZ) on one side, the Southern EZ countries (SEZ) on the other. It is quite clear that divergences have more to do with economy and polity than with geography. Suspicion runs high and mutual trust runs low between SEZ and NEZ. In these circumstances, it is extremely difficult to reform the EZ, while the conditions are set for populist, sovereigntist, anti-European movements to thrive. However the COVID pandemic may turn out to be a catalyst of reforms. We first attempt at understanding the legacy of the EZ crisis of the 2010s and its mismanagement by appealing to the present “consensus view”. This effort will help the reader focusing on why NEZ and SEZ disagree and to find out whether and how they can agree. Second, we try to build on this common narrative in order to identify the possible consensus changes in the EZ rules and institutions.