Is it Viable to Group Countries with Differing Cultural Values into the Same Monetary Union?

Since the crash of the euro in 2008 and the ensuing global economic meltdown, Europe has entered into a phase of fierce political and economic debate surrounding the common currency. In their haste to restore consumer confidence and stabilize the euro-zone, policy makers have neglected to address several critical questions. Specifically, what were the underlying causes of the euro’s troubles? More importantly, why has the road to recovery been exceedingly strenuous? I argue it is due to a massive cultural rift that exists be- tween the northern and southern regions. Through a cross-cultural comparative case-study of two major regional players, Germany and Spain, we will examine how national culture is gauged and to what effect cultural differences have on the long-term viability of the monetary union. In working towards a solution it is important to recognize the immense challenge of incorporating culture into economic policy due to culture’s seemingly unquantifiable nature. Despite the difficulties that arise from such a complex problem, the European Monetary Union can no longer afford to make decisions based solely on the recommendations of economists but must include information from other fields of study if the euro is to have a future. The adoption of this new approach to fiscal policy would not only affect the euro-zone countries, but also has the potential to fundamentally alter how all industrialized nations view the rela- tionship between economics and culture.