Eurozone is more disparate than pretty much every other group

The Eurozone is more internally incoherent that any hypothetical monetary union, research by JP Morg

Via FT alphaville and Paul Kedrosky comes this astonishing graph (pdf) from J.P. Morgan (click for big):

The x-axis is a measure of similarity between countries. It measures over 100 economic, social and political characteristics. Michael Cembalest, the reports author, then applied this measure to 11 hypothetical monetary unions, as well as to the major countries of the Eurozone (he excluded smaller countries like Cyprus and Malta, but the results aren't that different if they are included; nor does the inclusion of Greece affect the results all that much).

What he finds is that many monetary unions that came close to existing exhibit far more similarity than the Eurozone. This includes Latin America, the Gulf states, and Central America. He then pushed it further: reconstituting several former empires, including the USSR, Ottoman Empire, and the British Empire in Africa, would also result in unions with more simliarity than the EU.

Even a monetary union formed by simply picking the 13 countries beginning with the letter M would have more economic, social and political cohesion than the Eurozone does.

Cembalest concludes:

And still, Europe soldiers on, even as the rest of the world avoids monetary union in circumstances more favorable to it. What remains are political questions regarding how much inflation and fiscal transfer Germany can sustain; if a true fiscal union can be created, seen by some as indispensable to the Euro’s future; and how much austerity countries like Spain can take.

As this is a road less traveled, it’s hard to know how it will turn out. It’s a tough road, and the chart helps explain why. Europe’s problem is not just one of public sector deficit spending differences, but also of deeper, more fundamental differences across its various private sector economies.

Chancellor Merkel tries to get to grips with the Eurozone. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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PMQs review: Jeremy Corbyn turns "the nasty party" back on Theresa May

The Labour leader exploited Conservative splits over disability benefits.

It didn't take long for Theresa May to herald the Conservatives' Copeland by-election victory at PMQs (and one couldn't blame her). But Jeremy Corbyn swiftly brought her down to earth. The Labour leader denounced the government for "sneaking out" its decision to overrule a court judgement calling for Personal Independence Payments (PIPs) to be extended to those with severe mental health problems.

Rather than merely expressing his own outrage, Corbyn drew on that of others. He smartly quoted Tory backbencher Heidi Allen, one of the tax credit rebels, who has called on May to "think agan" and "honour" the court's rulings. The Prime Minister protested that the government was merely returning PIPs to their "original intention" and was already spending more than ever on those with mental health conditions. But Corbyn had more ammunition, denouncing Conservative policy chair George Freeman for his suggestion that those "taking pills" for anxiety aren't "really disabled". After May branded Labour "the nasty party" in her conference speech, Corbyn suggested that the Tories were once again worthy of her epithet.

May emphasised that Freeman had apologised and, as so often, warned that the "extra support" promised by Labour would be impossible without the "strong economy" guaranteed by the Conservatives. "The one thing we know about Labour is that they would bankrupt Britain," she declared. Unlike on previous occasions, Corbyn had a ready riposte, reminding the Tories that they had increased the national debt by more than every previous Labour government.

But May saved her jibe of choice for the end, recalling shadow cabinet minister Cat Smith's assertion that the Copeland result was an "incredible achivement" for her party. "I think that word actually sums up the Right Honourable Gentleman's leadership. In-cred-ible," May concluded, with a rather surreal Thatcher-esque flourish.

Yet many economists and EU experts say the same of her Brexit plan. Having repeatedly hailed the UK's "strong economy" (which has so far proved resilient), May had better hope that single market withdrawal does not wreck it. But on Brexit, as on disability benefits, it is Conservative rebels, not Corbyn, who will determine her fate.

George Eaton is political editor of the New Statesman.