Despite the creditable steps toward reform that were taken in the nineties, European economies are still struggling under a raft of burdens from the past: high structural unemployment, a welfare state that is overstretching the capacity of many countries, and future strains caused by demographic developments. The euro and the current economic slump have made structural problems even more apparent.
At the same time, the euro will prove to be the most ambitious reform program of the European Union. Any economy refusing to become more flexible will be left behind.