Divergent Economic Growth and Employment Conditions within the Euro Area

We present evidence that the process of euro adoption and the creation of the Economic and Monetary Union has enhanced the economic growth of the Euro zone and has determined better conditions on the labour markets. Still, these developments are not homogenous across countries. There are important differences in the rate of GDP growth, the increase in labour productivity or employment conditions. Moreover these conditions tend to be persitent across time, weakening the belief that once the euro is adopted, countries tend to converge economically.