Yet it has seen its unemployment fall from more than 15% in 2012 to 7% today, not least because of its flexible labour market and successful industrial strategy aimed at attracting FDI. There are some today who believe that Europe would be better off if we did not have the single currency and could devalue our exchange rates instead.
But as we have seen, countries that have implemented reforms do not depend on a flexible exchange rate to achieve sustainable growth. And for those that have not reformed, one has to ask how beneficial a flexible exchange rate would really be. After all, if a country has low productivity growth because of deep-rooted structural problems, the exchange rate cannot be the answer.