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Title: Monnet's Error?

Author(s): Luigi Guiso, Paola Sapienza and Luigi Zingales

Publication Date: April 2015

Keyword(s): euro, euro crisis and European Union

Programme Area(s): International Macroeconomics

Abstract: Entering a currency union without any political union European countries have taken a gamble: will the needs of the currency union force a political integration (as anticipated by Monnet) or will the tensions create a backlash, as suggested by Kaldor, Friedman and many others? We try to answer this question by analyzing the cross sectional and time series variation in pro-European sentiments in the EU 15 countries. The 1992 Maastricht Treaty seems to have reduced the pro-Europe sentiment as does the 2010 Eurozone crisis. Yet, in spite of the worst recession in recent history, the Europeans still support the common currency. Europe seems trapped: there is no desire to go backward, no interest in going forward, but it is economically unsustainable to stay still.

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Bibliographic Reference

Guiso, L, Sapienza, P and Zingales, L. 2015. 'Monnet's Error?'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10559