Introduction

Like viruses, crises too can rapidly change their DNA: the financial crisis of 2008 changed from international to regional, from financial to real, eventually turning into an existential threat to the whole European integration project. In the institutional context of the Eurozone (EZ), the financial crisis soon developed into a sovereign debt crisis, dragging the banks along with it. In the austerity environment that followed, the southern periphery (SP) never completely recovered the losses in output, employment, and fiscal sustainability. Thus, the "symmetric" coronavirus shock hit countries that were in highly asymmetric conditions. In fact, not all the countries of the Union have the resources needed to intervene in support of their economy, prompting concern that countries with the deepest pockets might be getting an unfair advantage in the EU's single market. Far from triggering mutual protection, the Covid-19 crisis seems to be paving the way for the same mistakes that followed the 2008 financial crisis. The centrifugal forces threatening disintegration of the European Monetary Union (EMU) seem to have been defused, albeit only in part and only in extremis, at least for the time being. However, the survival of the Union depends not only on responding to the severe financial problems caused by the epidemic, but also means addressing the long-term, structural problems that led to the increasing divergences among her members. As Chancellor Merkel herself acknowledged, "It is in nobody's interest for Germany alone to be strong after the crisis". Convergence is essential to put the Union on a more solid basis so as to guarantee its long-term sustainability.

What policies and what reforms should be implemented to pursue this objective? And are they economically and politically feasible? Trying to answer these questions, we shall briefly review the institutional and structural causes of the increasing divergence between core and SP, shedding light on three momentous events: the creation of the monetary union, the 2008 financial crisis and the Covid-19 shock.