Greece and Portugal have different wage rates, tax regimes, and business cycles. The two countries have also reacted differently in the past to external economic shocks. The dissimilarities are an example of one of the drawbacks of the euro that economists refer to as the EU not being in a(n)

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The concept of an "optimal currency area" refers to a geographic region where it would be economically most efficient to have the entire region share a single currency. The differences in wage rates, tax regimes, and business cycles between Greece and Portugal illustrate the challenges of having a single currency (the euro) in a region that is not an optimal currency area.

Greece and Portugal Have Different Wage Rates, Tax Regimes, and Business