The State of the European Union. The European Parliament faces its most important elections yet

73 Completing monetary union has become a European economic policy priority for the coun- tries of the eurozone. If monetary union is not consolidated, we cannot rule out the possibility that a specific shock in one or more member countries could threaten the break-up of the en- tire eurozone. Although there is a broad consen- sus as to the need to undertake reforms to en- sure the irreversibility of the single currency, there are very significant differences between Member states with respect to the steps that must be taken to achieve this objective. As a re- sult, progress in this area has been slow, and in the meantime the eurozone remains exposed to the danger of negative shocks. The difficulty in reaching agreement derives not only from divergences of opinion with re- spect to the steps to be taken, but also reflects the fact that countries differ in their diagnoses of the underlying causes of the economic crisis it- self. In the absence of a shared analysis, and with different views of the role that European institutions should play in the economy, member countries have struggled to reach agreement. While each country has its own specific con- cerns and emphases, and these are explored below, we can start by identifying two broad diametrically opposed positions. The first of these, traditionally associated with the countries of northern Europe, starts from the view that satisfactory operation of monetary union de- pends on convergence between member coun- tries, both in general economic terms and, spe- cifically, with regard to productivity. If this convergence occurs, it is argued, the imbalances within the monetary union will be reduced: for example, increased productivity in countries with a current account deficit (traditionally, those of southern Europe) would make it pos- sible to reduce these deficits. Improved produc- tivity in these countries would also generate a corresponding reduction in the current account balance of countries such as Germany, and would thus contribute to more balanced growth. As a result, the financial positions of these countries would also become more bal- anced, so that the countries of the eurozone as a whole would be less exposed to the specific 2018: a year of slow progress in eurozone reform Víctor Echeverría