DP842 The Political Economy of Monetary Union in Europe

Author(s):	Paul De Grauwe
Publication Date:	September 1993
Keyword(s):	Europe, Monetary Integration, Political Economy
JEL(s):	F33, F36, F42
Programme Areas:	International Macroeconomics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=842

The Maastricht transition strategy towards monetary union is based on the idea that the transition strategy should be gradual, and that entry into the union should be conditional on the fulfilment of convergence criteria. It is argued in this paper that this approach is not based on an economic necessity, but on a political one. In particular, it serves the political objective of Germany to keep the union small.