Mr Massimo M. Beber
Fellow in Economics

Senior Tutor


 

 

Sidney Sussex College

Cambridge CB2 3HU
Tel. 01223 338870 (direct); 338844 (Tutorial Office)
mb65@cam.ac.uk
http://people.ds.cam.ac.uk/mb65/


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ONE MARKET, ONE MONEY? THE ECONOMICS AND POLITICS OF EUROPEAN MONETARY UNION

A Presentation for the Sidney Sussex Arts, Humanities and Social Sciences Summer School, August 2013

Money plays a special role not just in economic analysis, but also in public debate - it is therefore a good topic to explore the interdependence between markets and politics, both at the national and, increasingly, at the international level. At the end of the 1980's, the (then twelve) countries of the European Economic Community were in sight of a fundamental achievement - the completion of a genuine single market, within which goods, services, capital, and labour would circulate and compete freely under a consistent set of market rules.  Should these countries make integration truly complete, by removing the "inconvenience" of separate currencies and the uncertainty of distinct national monetary policies? By committing irrevocably to Monetary Union in the Maastricht Treaty (with the exception of the UK and Denmark, who won the right to opt out while signing up to the rest of the treaty), the member states answered in the affirmative, and after a period of transition, during which macroeconomic policies were intended to become aligned (the "Maastricht Convergence Criteria"), the Euro was launched on 1st January 1999.

One and a half decades later, many of the new members in central and Eastern Europe still aim to join the Eurozone - yet life inside it has been far from comfortable for existing members, creating deep resentment against European institution, if not directly against Europe's sincle currency.  How do we explain this apparent paradox?  The presentation and supplementary readings for this session explore the hypothesis that the Euro's problems stem from the lack of fiscal (and, therefore, political) integration comparable to that existing in federal systems (from Germany to the United States).

BASIC FACTS AND CONCEPTS

European Commission (Economic and Financial Affairs) "The Euro"  (the pages on this website give you a good introduction to the basic history and institutions of the single currency)

Ramsden (2013) "The Euro: 10th Anniversary of the Assessment of the Five Economic Tests" (podcast)

Lecturer's Presentation

ADDITIONAL READINGS

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