Does the Euro Make a Difference?

Ten years of GDP data suggest that using the euro neither accelerates nor holds back economic growth

Lilou Legros · Matei Dăianu · Alex Sklad

Introduction -

Ever since the Eurozone was born in 1999, economists have argued about its influence on countries’ economic growth. The euro reshapes trade flows, eliminates exchange rate risk, and ties governments to the borrowing limits of the Stability and Growth Pact (Ioannatos, 2018), all of which have an impact on GDP. Our analysis covers the years between 2014 and 2024 (these included), a period in which states experienced the debt crisis aftermath, a global pandemic, and sharp recoveries. Thus, our research question is the following: Is there a statistically significant difference between the mean GDP growth rate of Eurozone and non-Eurozone states between 2014 and 2024?

Method and Result -

Using Eurostat data for 35 European countries, we calculated each country’s average annual GDP growth rate across the full period. Seventeen countries formed the Eurozone group and eighteen the non-Eurozone group. Lithuania and Croatia, which switched currency during the timeframe considered, were excluded to keep the comparison coherent. Notable outliers included Ireland and Malta on the Eurozone side, and Turkey among non-members, all of which were retained as their data remained relevant to the question. Statistical testing was carried out in IBM SPSS using a Levene’s test followed by an independent-sample t-test, at a 5% significance threshold.

The result of the Levene’s test allowed for the assumption of equality of variances between the groups and the t-statistic could not reject the null hypothesis of no significant difference. Supporting the result of the t-test, the mean difference between the two groups was −0.016 percentage points, at a 95% confidence interval.

Discussion -

The result does not mean that the euro has no economic effects. The ECB’s liquidity provision offers real protection against interest rate volatility (Panait & Radoi, 2025), and the single currency has broadly benefited trade, even if that effect has been shrinking over time (Sousa, 2012, as cited in Ioannatos, 2018). What the results show is that these effects do not impact average GDP growth rate in a statistically significant way.

There exist observable differences between countries. For example, Ireland, which benefited from the Eurozone, experienced extraordinary growth, 16.3% in 2021 and 8.3% in 2022 (Eurostat, 2026). Meanwhile, Poland averaged 4.1% annual growth between 2004 and 2023 without ever adopting the euro (Próchniak & Rapacki, 2024). The euro as an independent variable is insufficient to predict economic growth (Conti, 2019). The factors that drive growth, such as investment, productivity, institutions, and fiscal policy, seem to operate largely independently of currency choice (Filip et al., 2021).

Conclusion -

After conducting a t-test, we concluded that there is no statistically significant difference between the mean GDP growth rate of Eurozone and non-Eurozone countries. This result agrees with other research on the subject. The euro itself is not a growth engine for economic growth, but neither is it a setback. What determines the mean GDP growth rate of a European country is more correlated with internal matters, than with which currency it uses.

References -

Aytug, H. (2026, January 28). United in currency, Divided in growth: Dynamic effects of Euro adoption. https://doi.org/10.48550/arXiv.2601.20169

Conti, M. (2019). The introduction of the euro and economic growth: Some panel data evidence. https://ideas.repec.org/a/cem/jaecon/v17y2014n2p199-212.html

Eurostat. (2026, January 21). Real GDP growth rate - volume. Publications Office of the European Union. https://doi.org/10.2908/tec00115

Filip, M.-D., Setzer, R., & European Central Bank. (2021). The impact of regional institutional quality on economic growth and resilience in the EU. ECB Working Paper Series No. 3045. https://www.ecb.europa.eu/pub/pdf/scpwps/ecb.wp3045~ad74f198a7.en.pdf

Ioannatos, P. E. (2018). Has the Euro Promoted Eurozone’s Growth? Journal of Economic Integration, 33(2), 1388–1411. https://doi.org/10.11130/jei.2018.33.2.1389

Panait, N. G., & Radoi, M. A. (2025). Economic evolution in Euro-adopting states vs. future adopters: A comparative analysis. ECONSTOR, 13(8), 1–25. https://www.econstor.eu/bitstream/10419/329519/1/economies-13-00239.pdf

Próchniak, M., & Rapacki, R. (2024). Economic growth and real convergence in Central and Eastern Europe: lessons for the future enlargement of the EU. European Policy Analysis, 1–3. https://sieps.se/media/22qhrziy/2024_24epa.pdf