At their Maastricht summit, heads of state of the European Community (EC) countries agreed to establish a single currency and a common central bank by the end of the century. For students of international political economy, the treaty on monetary union offers intriguing puzzles: Why did EC governments commit themselves to such a far-reaching sacrifice of sovereignty? Why did national political leaders in some cases outrun public opinion in their enthusiasm for monetary integration? This study seeks a political explanation of the choices that produced the late-1980s movement for monetary union in Europe. It examines the conversion to monetary discipline in several EC states during the 1980s, arguing that the shift toward anti-inflationary rigor was a necessary precondition for discussions on monetary union. The article outlines three general options for a European monetary regime, based variously on unilateral commitments, multilateral arrangements, and full integration. Treating national preference formation as endogenous and requiring explanation, the article weighs five propositions that explain the motives and preferences of national leaders.
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