The politics of the Eurosystem

Europe's political leaders made a historic policy choice in December 1991 at Maastricht: they agreed to set up an independent central bank to run monetary policy with the specific goal of maintaining stable prices. With a stroke of the pen, the leaders made a fundamental reform to one of the tools of economic policy - as a reaction to the high inflation that stalked Europe after the oil shocks of the mid-1970's. In the subsequent decade, politicians have not been able to be so bold in reforming