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Le choc de la nouvelle? Maastricht, dé jà vu and EMU reform

Featherstone, Kevin, (2012), ‘Le choc de la nouvelle? Maastricht, dé jà vu and EMU reform’, Greek Political Science Review, Issue 39, May-November.

The Maastricht legacy casts a long shadow on current reform efforts to stabilize the Eurozone or, worse, avoid its break-up. The initial agreement was vulnerable on two fronts, the absence of economic governance and a lack of cross national-solidarity that would have supported burden-sharing the EMU. The sovereign debt crises in Greece, Ireland, and Portugal exposed the gaps and led to a reworking of the EMU set-up.  This however was not a paradigmatic shift but a ‘lock-in’ to the Maastricht frame, consistent with the original provisions. Recalibrating and toughening up the rules was hardly a substitute for the absence of mutual support. With path dependence increasing the adjustment costs, ‘institutional reforms’ risk an iteration of financial crisis- in debt exposure and banking system viability.