Eurozone countries should deepen their macroeconomic coordination and broaden surveillance as a lesson learned in the financial crisis, the European Commission said on Wednesday.
The commission said in its annual statement on the euro that the single currency shared by 16 European Union (EU) member states has protected the area from the exchange rate and interest rate turbulences that proved so damaging during past crises.
It has also played a valuable role as an anchor of sound macroeconomic policies for other EU member states actively pursuing the adoption of the euro, or whose currencies are linked to the euro, while the capability of the European Central Bank (ECB) to act swiftly in collaboration with major central banks has contributed to the stability of the international monetary system as a whole.
But the crisis also exposed the vulnerability of some member states that have accumulated macroeconomic imbalances, the commission said.
It said the same benign macroeconomic conditions that facilitated the expansion of credit worldwide, allowed some euro- area member states to finance fast, but increasingly unbalanced economic growth, as the inflowing capital was not always channeled to its most productive uses.
"Countries in current account surplus were faced with an immediate fall in growth as soon as global demand faltered, given that the engine of domestic demand never really kicked in," the commission said.
Leaders from the Group of 20 (G20) world's major economies agreed at a summit in the U.S. city of Pittsburgh in September to better coordinate their macroeconomic policies and avoid unsustainable global imbalances.
The commission said the eurozone countries should also increase their ability to speak with one voice and seek a more effective representation in international financial and economic organizations and fora.
"With the G20 being firmly established as the new platform for global economic policy coordination, the euro area's unique economic and institutional identity must be recognized," it said.