The Wall and Maastricht: exogenous shocks and the initiation of the EMU and EPU IGCs

Abstract:

Scholars disagree about the role of exogenous shocks in initiating the European political and economic intergovernmental conferences leading to the Maastricht Treaty. Initially, scholars viewed the intergovernmental conferences (IGCs) as a response to German reunification. Over time, the literature began emphasising the role of wider financial market instability. This article reconsiders the role of exogenous shocks prior to and including the fall of the Berlin Wall. It concludes that the initiation of the Maastricht Treaty was significantly influenced by a series of shocks starting well before, but not excluding, the collapse of the Berlin Wall. These shocks provoked the parties, particularly Germany and France, to alter their preferences and align their interests.