This understanding was reflected in the fact that, while monetary policy became European, important parts of economic policy remained at the national level – and with relatively loose common governance. This seemed natural as many of these policies – such as labour market institutions or social protection schemes – are deeply rooted in a country’s social model and national traditions.
But with the benefit of experience, I am sceptical as to whether this view is still valid. That economies can adjust and grow is in fact very much a concern for others. If some countries in monetary union perpetually adjust more slowly than others, they are likely to have consistently higher unemployment.