Some Convergence Actually Took Place In The Euro Zone

This graph, from a presentation of the ceo of the Dutch Central Bank, shows that some convergence actually  took place since the implementation of the Euro. The graph shows the difference in the growth of the listed countries with the growth of Germany. Especially Ireland, Greece and Spain grew a lot faster than Germany. In 2007 that difference was even 40 percent for Ireland, cumulatively. Portugal and Italy were not able to generate more growth than Germany.

DNB

One of the causes for this convergence may be that Ireland, Spain and Greece saw their real interest rate decline significantly. This graph shows that the extra growth was actually partly financed with borrowed money:

DNB

Also this was accompanied by inflation:

DNB