`Tough Love': How the ECB's Monetary Financing Prohibition Pushes Deeper Euro Area Integration

Journal of European Integration, 2013, Vol. 35, No. 3, pp. 223-237

Posted: 9 Jul 2013

Date Written: April 17, 2013

Abstract

This paper analyzes the underlying dynamics of institutional change in economic governance in EMU. We show that the crisis revealed significant gaps between the intentions of the designers of EMU and the observed outcome. Building on the path dependence literature we use the framework of historical institutionalism to understand how policy-makers were constrained in their options for the containment and resolution of the sovereign debt crisis. We argue that the principle which prohibits the Central Bank from financing governments as enshrined in the Maastricht Treaty was a causal factor in fostering reform and deeper integration.

Keywords: economic governance, EMU, ECB

Suggested Citation

Yiangou, Jonathan and Glöckler, Gabriel and O'Keeffe, Mícheál, `Tough Love': How the ECB's Monetary Financing Prohibition Pushes Deeper Euro Area Integration (April 17, 2013). Journal of European Integration, 2013, Vol. 35, No. 3, pp. 223-237 , Available at SSRN: https://ssrn.com/abstract=2291211

Jonathan Yiangou

Independent ( email )

Gabriel Glöckler (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Mícheál O'Keeffe

Independent ( email )

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