Abstract
If the Maastricht Treaty had referred to current account and investment expenditure separately, along the lines we previously introduced and called “Maastricht 2”, the euro area would have had a higher gross domestic product (GDP) of around 5% at the end of 2014 and a higher total employment of 2.7 million units.
As a consequence, the total government deficit in the area would have been 90 billion euro higher and total government debt would have been around 500 billion euro higher. However, due to higher GDP, the ratio between debt and GDP would have been at 84% rather than at the historical 92%.
In addition, if these results are considered together with the ones we obtained for the super euro, illustrated in Chap. 9, very solid proof can be found for what we called a negative-sum game played by the euro area when implementing incorrect monetary and fiscal policies. These proved to be the real “internal” causes (the roots) of the European crisis that we have experienced over the past fifteen years.
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Notes
- 1.
The EU countries that have adopted the euro are: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain. The EU countries that have not joined the euro are Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania, Sweden, the United Kingdom. In the course of our analysis a referendum was held in Britain to exit the European Union. As known, the result has led to the so-called Brexit. This does not mean that Britain is automatically out of the EU. The referendum requires the British government to start a long negotiation process, at the end of which Great Britain can be excluded from the EU.
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Baldassarri, M. (2017). A New Maastricht Treaty?. In: The European Roots of the Eurozone Crisis. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-58080-7_10
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DOI: https://doi.org/10.1007/978-3-319-58080-7_10
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