Under the prospect of productive specialization, the degree of potential success of the euro since its inception was seen as closely linked to the development of effective risk‐sharing mechanisms across EU members. Without shared fiscal resources, financial integration was expected to play a leading role in this respect. This paper documents the failure in fulfilling this expectation: Along with an analysis of the evolution of specialization and risk‐sharing, we present evidence supporting the claim that progress in financial integration has not been conducive to income risk‐sharing across euro area members, while it might have favoured a specialization split between countries with low‐medium and high technology productive structures. As a result, monetary union members face higher income fluctuation risk without enhanced insurance protection. Additionally, evidence suggests a differential impact of the specialization split on sector productivity, contributing to making the monetary union a club of non equals.