Restrictive Economic Policies of European Economic and Monetary Union: A Critical Analysis

Abstract

This article critically examines the Austerity policy of European Monetary Union (EMU) implemented in a severe manner also after the 2007 global financial crisis. Ordoliberism is considered the historical starting point of this policy by many economists. Instead my argument starts from the consideration that this policy was widely accomplished only after World War II, when East Germany was divided from West Germany. An important downsides of austerity policies on which I will focus is that it has affected the Maastricht Treaty and the conditions for entering the EU, which were applied generally to all participating countries.

Keywords: Restrictive Monetary Policy, Austerity, Monetary and Economic European Union

JEL Classification: E52, E58, E62