Is Maastricht a Good Contract

The Maastricht Treaty calls for the creation of European Monetary Union (EMU) by 1999 but makes accession of individual countries conditional on the fulfilment of specific convergence criteria. The Maastricht transaction trades the replacement of the Bundesbank by a European Central Bank at the centre of European monetary affairs as a reward for prior convergence. This article interprets the Maastricht Treaty provisions as a contract device that organizes a difficult transition to EMU by providing convergence incentives, co-ordinating conflicting national interests and extracting information about candidate countries’‘stability culture’.