Mistrust between Eurozone countries has cost the single currency bloc "millions of jobs", according to France's top central banker, who called for the creation of a Eurozone parliament to help the recovery.
The Eurozone economy could be up to five percentage points bigger had it been fully prepared for the economic crisis, but "deep political resistance" prevented national governments from pooling resources and fighting the slowdown together.
Speaking to the German Institute for Economic Research yesterday, Francois Villeroy de Galhau, governor of the Banque de France said, "the absence of coordination has a genuine economic cost ... in the order of two to five per cent of GDP since the crisis, and therefore millions of jobs."
He added that scepticism between the two core Eurozone countries - France and Germany - had stifled policymaking and was hampering the efforts both of the European Central Bank (ECB) and national governments.
"The French call for Germany to support coordination, and the German doubt about French reforms, have been and are still well-founded.
"This requires overcoming distrust between countries ... We know there is deep political resistance to sharing fiscal resources and sovereignty, as well as a rising Euroscepticism."
Villeroy de Galhau said that Europe should look at introducing a Eurozone parliament, a quasi government and cabinet with the head of the Eurogroup of finance ministers becoming a de facto finance minister for the entire single currency area.