After Maastricht. A guide to European Monetary Union

After Maastricht. A guide to European monetary union:
The aims of this book are both expository and critical. It aims, firstly, to present students of European integration with the minimum information required to understand the current project of economic and monetary union - the historical background to the project, its political economy and the economic theories which are used to interpret it.

The second objective is to put the normal understanding of monetary union to the test of critical examination. It is argued that monetary theory in general and international monetary economics in particular are fragile and uncertain bodies of doctrine which are far from giving us a solid and reliable basis for monetary policies. Further, the history of monetary co-operation within the EU is marked by many serious policy errors, the latest and most dramatic being the unnecessary and damaging recession of 1991-92 for which millions of European citizens paid a very heavy price. Finally, it is suggested that the plans for monetary union embodied in the Treaty of Maastricht are seriously flawed: they involve both the risk of more contradictory pressures on employment and production and the failure to grasp the opportunities which monetary union could open up of desirable reform within Europe and on a global scale.

In spite of these criticisms, the conclusion of the book is that monetary union should be pursued while attempts are made to correct the weaknesses of the existing design for a single currency and a European Central Bank. The author argues that EMU should exist within an overall neo-Keynesian approach to fiscal management. The view is taken that failure would be very damaging to European integration as such and to the hopes that integration holds out for a more stable, equitable and efficient economy. It is suggested, in particular, that Britain has little to gain and a great deal to lose from attempts to hold out against the drive to monetary integration by the UK's partners in the EU.

Grahl, John
After Maastricht. A guide to European monetary union
Lawrence and Wishart, 1997 ISBN: 0-85315-822-3
Price: £12.99