DP1458 The Prospects of a Mini Currency Union in 1999
|Author(s):||Paul De Grauwe|
|Publication Date:||September 1996|
|Keyword(s):||Maastricht Treaty, monetary integration|
|JEL(s):||F33, F36, F42|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=1458|
In this paper we analyse the prospects of a mini currency union in Europe. We argue that the Maastricht strategy will create a situation in which the countries excluded from the EMU will use their negative voting power to bar the entry of a number of core countries into the union. The countries excluded will have a strong legal basis to do so because several core countries will fail one or more Maastricht convergence norms. Thus, the scenario that the financial markets believe in today is highly unrealistic. Instead countries will be confronted with the choice of a maxi currency union or no currency union.