IDEAS home Printed from https://ideas.repec.org/p/ave/wpaper/502007.html
   My bibliography  Save this paper

The long road to EMU: The Economic and Political Reasoning behind Maastricht

Author

Listed:
  • Francisco Torres

    (IEE - Universidade Católica Portuguesa and INA)

Abstract

This paper aims to examine whether the economic and political reasoning behind Maastricht is consistent with earlier approaches to monetary integration. In doing so, it revisits the intellectual debate on monetary integration in Europe at different stages. It concludes that Economic and Monetary Union (EMU) as agreed at Maastricht reflected a compromise between two different but converging preferences, in the context of the experience of the European Monetary System (EMS) and other developments in national and European politics as well as in economic thought, on the role of monetary policy and institutions; the fall of the Berlin Wall may have added a new political dimension that might have made it easier to agree on the blueprint and on the calendar for the realisation of EMU. The various (political and economic) motivations for the convergence of initially different views on the role of monetary policy and successive interpretations of the objectives of EMU are discussed within the wider context of the process of European integration.

Suggested Citation

  • Francisco Torres, 2007. "The long road to EMU: The Economic and Political Reasoning behind Maastricht," Working Papers de Economia (Economics Working Papers) 50, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
    • Handle: RePEc:ave:wpaper:502007
    as

    Download full text from publisher

    File URL: https://www.ua.pt/egi/ReadObject.aspx?obj=11034
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121.
    2. Torres,Francisco & Giavazzi,Francesco (ed.), 1993. "Adjustment and Growth in the European Monetary Union," Cambridge Books, Cambridge University Press, number 9780521440196.
    3. Paul Grauwe, 1996. "The economics of convergence: Towards monetary union in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 132(1), pages 1-27, March.
    4. Francesco Giavazzi & Marco Pagano, 1991. "The Advantage of Tying One's Hands: EMS Discipline and Central Bank Credibility," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 303-330, National Bureau of Economic Research, Inc.
    5. Francisco Torres, 2006. "On the efficiency-legitimacy trade-off in EMU," Working Papers de Economia (Economics Working Papers) 36, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
    6. Ivo Maes, 2006. "THE ASCENT OF THE EUROPEAN COMMISSION AS AN ACTOR IN THE MONETARY INTEGRATION PROCESS IN THE 1960s," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(2), pages 222-241, May.
    7. Haas, Peter M., 1992. "Introduction: epistemic communities and international policy coordination," International Organization, Cambridge University Press, vol. 46(1), pages 1-35, January.
    8. Paul De Grauwe, 1993. "The Political Economy of Monetary Union in Europe," The World Economy, Wiley Blackwell, vol. 16(6), pages 653-661, November.
    9. De Grauwe, Paul, 1996. "Monetary union and convergence economics," European Economic Review, Elsevier, vol. 40(3-5), pages 1091-1101, April.
    10. Giorgio Basevi & Michele Fratianni & Herbert Giersch & Pieter Korteweg & David O’mahony & Michael Parkin & Theo Peeters & Pascal Salin & Niels Thygesen, 1978. "The All Saints’ Day Manifesto for European Monetary Union," Palgrave Macmillan Books, in: Michele Fratianni & Theo Peeters (ed.), One Money for Europe, chapter 2, pages 37-51, Palgrave Macmillan.
    11. Charles Wyplosz, 2006. "European Monetary Union: the dark sides of a major success [‘The macroeconomics of low inflation’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 21(46), pages 208-261.
    12. Stefan Collignon, 2005. "Learning to live in Euroland - The role of France and Germany," Macroeconomics 0503012, University Library of Munich, Germany.
    13. Eichengreen, Barry & Ghironi, Fabio, 1995. "European Monetary Unification: The Challenges Ahead," CEPR Discussion Papers 1217, C.E.P.R. Discussion Papers.
    14. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francisco Torres, 2007. "A convergência para a União Económica e Monetária: objectivo nacional ou constrangimento externo?," NIPE Working Papers 21/2007, NIPE - Universidade do Minho.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mohd Hussain Kunroo & Irfan Ahmad Sofi & Naushad Ali Azad, 2016. "Trade implications of the Euro in EMU countries: a panel gravity analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(2), pages 391-413, May.
    2. Nicola Acocella, "undated". "The theoretical roots of EMU institutions and policies during the crisis," Working Papers 126/14, Sapienza University of Rome, Metodi e Modelli per l'Economia, il Territorio e la Finanza MEMOTEF.
    3. Singleton,John, 2010. "Central Banking in the Twentieth Century," Cambridge Books, Cambridge University Press, number 9780521899093.
    4. Heipertz, Martin, 2003. "The Stability and Growth Pact - Not the best but better than nothing. Reviewing the debate on fiscal policy in Europe's Monetary Union," MPIfG Working Paper 03/10, Max Planck Institute for the Study of Societies.
    5. Fabrice Capoen & Henri Sterdyniak & Pierre Villa, 1994. "Indépendance des banques centrales, politiques monétaire et budgétaire : une approche stratégique," Revue de l'OFCE, Programme National Persée, vol. 50(1), pages 65-102.
    6. Jamus Jerome Lim, 2021. "The limits of central bank independence for inflation performance," Public Choice, Springer, vol. 186(3), pages 309-335, March.
    7. Tamim Bayoumi and Barry Eichengreen., 1996. "Ever Closer to Heaven? An Optimum-Currency-Area Index for European Countries," Center for International and Development Economics Research (CIDER) Working Papers C96-078, University of California at Berkeley.
    8. Filippo Balestrieri & Mr. Suman S Basu, 2018. "An Imperfect Financial Union With Heterogeneous Regions," IMF Working Papers 2018/205, International Monetary Fund.
    9. Ricci, Luca Antonio, 2008. "A Model of an Optimum Currency Area," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 2, pages 1-31.
    10. Zemanek, Holger, 2009. "Country Size and Labor Market Flexibility in the European Monetary Union: Why Small Countries Have more Flexible Labor Markets," MPRA Paper 16482, University Library of Munich, Germany.
    11. Vassilis Monastiriotis & Sotirios Zartaloudis, 2010. "Beyond the crisis: EMU and labour market reform pressures in good and bad times," LEQS – LSE 'Europe in Question' Discussion Paper Series 23, European Institute, LSE.
    12. repec:hal:spmain:info:hdl:2441/5266 is not listed on IDEAS
    13. H.P. Grãœner & C. Hefeker, 1995. "Domestic pressures and the exchange rate regime: why economically bad decisions are politically popular?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(194), pages 331-350.
    14. Michael D. Bordo, 1993. "The gold standard, Bretton Woods and other monetary regimes: a historical appraisal," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 123-191.
    15. Joanna Tyrowicz, 2007. "The OCA Theory and Its Empirical Application for the EMU," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5-6, pages 45-60.
    16. Monticelli, Carlo, 2003. "Voting on monetary policy in the Council of the European Central Bank," Economic Modelling, Elsevier, vol. 20(5), pages 1015-1051, September.
    17. Cowen, Tyler & Glazer, Amihai & Zajc, Katarina, 2000. "Credibility may require discretion, not rules," Journal of Public Economics, Elsevier, vol. 76(2), pages 295-306, May.
    18. Persson, Torsten & Tabellini, Guido, 1999. "Political economics and macroeconomic policy," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 22, pages 1397-1482, Elsevier.
    19. Goutsmedt, Aurélien & Truc, Alexandre, 2023. "An independent European macroeconomics? A history of European macroeconomics through the lens of the European Economic Review," European Economic Review, Elsevier, vol. 158(C).
    20. Ibrahim Elbadawi & Klaus Schmidt-Hebbel & Raimundo Soto, 2015. "Why do Countries have Fiscal Rules?," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 18(3), pages 28-61, December.
    21. Alberto Bagnai, 2014. "Un external compact per rilanciare l'Europa," a/ Working Papers Series 1401, Italian Association for the Study of Economic Asymmetries, Rome (Italy).

    More about this item

    Keywords

    Economic and Monetary Union; Bretton Woods; European integration; Werner plan; European Monetary System; inflation; convergence of preferences; epistemic communities; currency crisis; monetary sovereignty; Maastricht treaty; convergence requirements.;
    All these keywords.

    JEL classification:

    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ave:wpaper:502007. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marta Ferreira Dias (email available below). General contact details of provider: https://edirc.repec.org/data/deavept.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.