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.
Still, it is important to ask, if some governments did not follow the right policies to succeed in EMU, why did they not? The euro area relied heavily on the notion that the integration process would itself create the incentives for sound policies.