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The Politics Of Maastricht

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  • GEOFFREY GARRETT

Abstract

The Economic and Monetary Union (EMU) treaty signed at Maastricht does not guarantee the recreation of German‐style economic policies and outcomes at the European Community (EC) level. Membership was not limited to countries that mimic the German commitment to price stability. National representatives may outvote inflation‐averse EC central bankers in monetary policy decisions. The Council of Ministers has the power to set exchange rate policy vis‐à‐vis third currencies. The treaty does not provide binding constraints against fiscal profligacy in member states. The German government agreed to this suboptimal outcome because in the wake of the demise of the Soviet Union and German unification it had broader political interests in maintaining the pace of European integration at Maastricht. The Bundesbank's policy of high interest rates in 1992, however, has effectively guaranteed a two‐speed monetary union, in which the first group of members will be limited to a narrow deutschemark zone. Given the waning enthusiasm for integration across the EC, the German government has no incentive to alter this outcome.

Suggested Citation

  • Geoffrey Garrett, 1993. "The Politics Of Maastricht," Economics and Politics, Wiley Blackwell, vol. 5(2), pages 105-123, July.
    • Handle: RePEc:bla:ecopol:v:5:y:1993:i:2:p:105-123
    DOI: 10.1111/j.1468-0343.1993.tb00070.x
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    References listed on IDEAS

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    1. Magee,Stephen P. & Brock,William A. & Young,Leslie, 1989. "Black Hole Tariffs and Endogenous Policy Theory," Cambridge Books, Cambridge University Press, number 9780521377003.
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    Cited by:

    1. Enrico Spolaore, 2013. "What Is European Integration Really About? A Political Guide for Economists," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 125-144, Summer.
    2. Barry Eichengreen., 1993. "International Monetary Arrangements for the 21st Century," Center for International and Development Economics Research (CIDER) Working Papers C93-021, University of California at Berkeley.
    3. C. Hefeker, 1994. "German Monetary Union, the Bundesbank and the EMS collapse," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 47(191), pages 379-398.
    4. Taiki Murai & Gunther Schnabl, 2021. "Macroeconomic Policy Making and Current Account Imbalances in the Euro Area," CESifo Working Paper Series 9153, CESifo.
    5. Geoffrey Garrett & George Tsebelis, 1999. "More Reasons to Resist the Temptation of Power Indices in the European Union," Journal of Theoretical Politics, , vol. 11(3), pages 331-338, July.
    6. Baskaran, Thushyanthan, 2009. "Did the Maastricht treaty matter for macroeconomic performance?," MPRA Paper 30106, University Library of Munich, Germany.
    7. Hefeker, Carsten, 1994. "GMU, EMU, and the Bundesbank: The political economy of recent EMS-crises," Discussion Papers, Series II 221, University of Konstanz, Collaborative Research Centre (SFB) 178 "Internationalization of the Economy".
    8. Susanne Lohmann, 1997. "Linkage Politics," Journal of Conflict Resolution, Peace Science Society (International), vol. 41(1), pages 38-67, February.
    9. Thushyanthan Baskaran, 2009. "Did the Maastricht treaty matter for macroeconomic performance? A difference‐in‐difference investigation," Kyklos, Wiley Blackwell, vol. 62(3), pages 331-358, August.
    10. Zorn, Hendrik & Schäfer, Armin & Manow, Philip, 2004. "European Social Policy and Europe's Party-Political Center of Gravity, 1957-2003," MPIfG Discussion Paper 04/6, Max Planck Institute for the Study of Societies.
    11. Thomas König & Thomas Bräuninger, 1998. "The Inclusiveness of European Decision Rules," Journal of Theoretical Politics, , vol. 10(1), pages 125-142, January.
    12. Lisa L. Martin, 1994. "4. Heterogeneity, Linkage and Commons Problems," Journal of Theoretical Politics, , vol. 6(4), pages 473-493, October.

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