ABSTRACT
This chapter explains the fact that monetary integration in Europe is not only, or even mainly, a financial or an economic issue. The Maastricht Treaty of 1992 had established the Economic and Monetary Union (EMU). Along with subsequent amendments, the Treaty specified that while the then members of the European Union (EU) had a choice on whether or not to join the EMU, countries that would be admitted to the EU later, as full members, would have the legal obligation to eventually adopt the euro, thus joining the Eurozone (EZ). EMU’s designers were aware that for the EZ to function well, it would be insufficient just to fulfil the Maastricht criteria prior to entry. The likelihood of the euro outsiders joining the EMU has diminished in recent years with a better understanding today of the EMU’s fundamental design faults than when the Maastricht Treaty was signed, and later, during the EZ’s “sunshine era,” which preceding the Great Recession.
