The original design of EMU: ‘a house without a roof’ The Dutch government and the design failures of Maastricht, 1985-1991

The creation of the Economic and monetary union seemed to be a success until the outbreak of the severe Eurozone crisis in 2008. The Treaty of Maastricht did not foresee a possible outbreak of the this type of crisis: a financial crisis, a sovereign debt crisis and a severe economic crisis – all in one. The design of the Treaty of Maastricht contained four big design failures. Firstly, the Treaty proved to be too intergovernmental. Secondly, the Treaty did not contain a banking union, and left supervision of the financial system to the national surveillance bodies. In addition, the drafters did not take into account macro-economic imbalances and mainly focused on deficit spending of the Member States. And last but not least, the Treaty lacked crisis management and tools in order to ‘rescue’ the common currency, in case thing would go wrong. This thesis is about the question to what extent the Dutch government could know of foresee these problems in the period between Single European...Show moreThe creation of the Economic and monetary union seemed to be a success until the outbreak of the severe Eurozone crisis in 2008. The Treaty of Maastricht did not foresee a possible outbreak of the this type of crisis: a financial crisis, a sovereign debt crisis and a severe economic crisis – all in one. The design of the Treaty of Maastricht contained four big design failures. Firstly, the Treaty proved to be too intergovernmental. Secondly, the Treaty did not contain a banking union, and left supervision of the financial system to the national surveillance bodies. In addition, the drafters did not take into account macro-economic imbalances and mainly focused on deficit spending of the Member States. And last but not least, the Treaty lacked crisis management and tools in order to ‘rescue’ the common currency, in case thing would go wrong. This thesis is about the question to what extent the Dutch government could know of foresee these problems in the period between Single European Act and the Maastricht Treaty, 1985-1991. The research elaborates on three questions. First: were the design failures already part of academic literature and discussion at the time of the Treaty of Maastricht? The second parts elaborates on the advisory boards of the government: what did these boards advice regarding the design failure issues? The last part is about the statements of the Dutch government. The overall conclusion is that the Dutch government did ignore most of the warnings of the academic literature and the advises of the advisory boards. But in fact, it seemed that the Dutch government could not predict the outbreak of the Eurozone crisis.Show less

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The original design of EMU: ‘a house without a roof’ The Dutch government and the design failures of Maastricht, 1985-1991