Not every country in the EU is in the Eurozone. Given that the Single Market prevents EU countries from slapping each other with tariffs (Trump style), what prevents the countries in the EU but not in the Eurozone (e.g. Poland) from trying to devalue their currency and thus gain an (even short lived) economic advantage, especially over their Eurozone neighbors?

(On a broader international level, the IMF charter prohibits this, which doesn't mean it's not happening to some extent, worldwide.)

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    what makes you think a devaluation is an economic win-win for the country carrying it out and, especially, that voters would be thankful to a government for initiating one? outside the Euro, is everyone using that magic formula? Why not? And Europe before Euro? Jan 26, 2020 at 16:26
  • @ItalianPhilosophers4Monica: it's certainly been used although clear-cut examples may be somewhat distant. There's even theory under what conditions to use it. And nothing is without downsides for some groups... not even free trade.
    – Fizz
    Jan 26, 2020 at 16:57
  • @ItalianPhilosophers4Monica: and there's even the expert opinion of famous economists that there should have been more of it, even in the 1930s earth.columbia.edu/sitefiles/file/Sachs%20Writing/1985/…
    – Fizz
    Jan 26, 2020 at 17:17

1 Answer 1


As far as I understand this (so I'm open to better answers), substantial currency devaluation (e.g. by lowering central bank's interest rate or by the more recently used quantitative easing) results in a substantial increase in inflation. And the Maastricht criteria sets limits to inflation in EU member countries (not just the Eurozone).

No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU.

I'm guessing an EU country that flounts this would ultimate open itself to an infringement procedure, although I'm not aware of examples where EU countries were threatened with this over inflation.

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