We need answers to both these problems. For the economic convergence of the euro area will take time. Currently, the potential German coalition partners are debating quite sensible approaches on how to foster social inclusion, limit a race to the bottom in tax policies, and foster the convergence of the euro area economies. It’s too early to judge these positions.
The second problem – excessive debt, and high borrowing by governments in particular – could, in theory, be solved much more easily. However, the necessary political reforms have seen little progress so far. But here, again, the recent proposals of the potential German coalition partners are promising.