25 Years of the Maastricht Treaty: Real Divergence and Institutional Reform in the Eurozone

Abstract

The paper argues that 18 years after the introduction of the Euro, the European Monetary Union has yet been unable to achieve sufficient real economic convergence among its member economies. As a result, the European Central Bank (ECB) still faces a dilemma in the sense that the common monetary policy is unable to meet current policy requirements in both boom and recession countries. Of course, the extensive asset purchase programmes of the ECB in the aftermath of the Euro crisis provided the necessary time for policy reforms, but deep rooted structural problems in a number of member countries and a divergent understanding of macroeconomic policy have remained and will lead to sustained high tensions in the eurozone in the foreseeable future.