How product market reforms lubricate shock adjustment in the euro area

After 10 years of experience with the euro, few would dispute that the euro and the euro area fared much better than many observers expected. However, this does not mean that some policy concerns have not lingered on. One prominent concern on which analysts, defenders, advocates and diehard opponents agree is the fear of a too weak adjustment capacity of the euro area. The present essay deals with one element of adjustment in the absence of national exchange rates
and monetary policies, namely, the functioning of product markets as improved by reforms.