A new report by the German-based Centre for European Policy has shown in stark terms how damaging the introduction of the euro has been for many European Union countries.
The study marked the 20th anniversary of the controversial introduction of the currency.
The study looks at whether on balance the euro has led to an increase or a fall in prosperity. It does this by looking at historical trends in gross domestic product per head of population (GDP per-capita) before and after countries joined the Euro.
Looking at eight of the 18 eurozone countries, the report found that Germany and the Netherlands were by far the main beneficiaries, calling into doubt one of the main mantras of the EU; that it brings financial prosperity to its members.
The German economy between 1999 and 2017 gained more than $2.15 trillion in GDP per-capita amounting to around $26,037 per inhabitant. Had it not been for the Euro the GDP per capita of Germany would have, according to the study, been lower.
Other than Germany, only the Netherlands showed significant benefits, gaining more than $392 billion or $23,792 GDP per capita.
The study also highlighted a clear north-south divide between Germanic discipline and Mediterranean countries.
Italy and France, the second and third largest European economies respectively, have been two of the biggest losers of the eurozone.
According to the report, France saw a drop in its prosperity by more than $4.08 trillion and as much as $4.87 trillion in Italy. Both countries the report highlights would have done significantly better had they not joined the Eurozone.
With the European Union elections coming up in May, eurosceptic parties across the continent, but in particular Italy, will be propagating to voters the pros and cons of continued membership of a currency that no longer provides, if it ever did, the prosperity it promised.
The European Union dream
The European Union project and the euro were premised by their designers to be a bloc that would one day rival stronger states such as the US, China, India, Japan and Russia.
The rationale for the assumed benefit of the euro by those that designed it was to increase trade and reduce worries over currency fluctuations, keeping interest rates low to allow smaller members to take cheaper credit for development.
However, the hoped-for integration between the EU economies has largely favoured one nation, Germany.
The introduction of the euro artificially resulted in the depreciation of the Deutschmark - which as German businesses quickly discovered gave them a competitive edge, something they would not otherwise have had.
The International Monetary Fund (IMF) in a report estimated that the introduction of the euro could have distorted the German currency by as much as six percent.
While the rest of EU groans under increasing economic stresses that in the past, were they to have their own currency, they could have deflated their way out off, Germany’s current account surplus continues to hit new highs.
In 2018, Germany’s current account surplus, the measure of exports against imports into a country, was 8.2 percent of GDP, or $299 billion, according to IMF statistics, one of the highest in the world.
In a study published last year, A Time Bomb for the Euro? Understanding Germany’s current account surplus, Professor Jan Priewe drew attention to the systemic and structural “disequilibrium” within Germany’s export-led economic model.
“Many policymakers are blinded by export success and vested interests of German export industries. They trust in ‘laissez-faire’ and ‘no activism’ advice, in contrast to concerns from the European Commission and the IMF. In this sense, there exists a time-bomb for the cohesion of the Euro area,” he stated.
Comparatively, the Italian economy, according to the World Bank data, is as big now as it was in 1999. For countries like Italy, a lack of economic growth, high unemployment and the after effects of the 2008 financial crises have been exasperated by the inflexibility of the Eurozone.
The political ramifications of this have already been felt in Italy with the election of populist right-wing parties Lega Nord and the Five Star Movement.
Matteo Salvini the eurosceptic Deputy Prime Minister of Lega Nord has called it the "wrong currency and a wrong choice" and in the past has outlined the need for a Plan B to get Italy out of the EU.
Disaffection with the wider European Union project has resulted in a decline in the approval rating from Europeans on how well the project is working.
Events marking the 20th anniversary of the eurozone have been muted as the EU struggles to deal with rising nationalist forces and Britain leaving the bloc.