Italy and the Economic and Monetary Union

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This book analyzes Italy’s policy toward European monetary integration from the creation of the European Economic Community (EEC) in 1957 to the final stage of Economic and Monetary Union in 1999 and the first five years thereafter. It is argued that “ideas,” in the form of “policy paradigms,” are crucial in framing member states’ trajectories in the European Union (EU) and they are therefore core components of the process of Europeanization. Policy paradigms need to be contextualized by considering the evolution of domestic institutions.

According to the foreign policy paradigm that prevailed in Italy from the Second World War until the late 1990s, “Europe” has been of paramount priority, which has been associated with its political, economic and cultural modernization. The economic policy paradigm, instead, has shifted from Keynesian economics in the 1960s and 1970s to the monetarist-inspired, stability-oriented paradigm of the 1980s and 1990s. The pro-European foreign policy paradigm explains why Italian policymakers decided to join all the European monetary initiatives, whereas the economic paradigm, which, for most of the time, was far apart from the stability-oriented paradigm embedded in European monetary regimes, explains Italy’s difficult adaptation. The book concludes by pointing out that the foreign policy paradigm has begun to shift since the late 1990s.


“Understanding developments in national politics and national policies often provides the key to understanding important developments in European integration. There is, however, a long and continuing debate among scholars as to what the crucial ingredients are in the member states that determine which European policies their governments choose to endorse and those which they refuse ... This volume adds to the literature on the importance of ideas, and in particular the ways in which ideas about the value of ‘sound money’ took root in the Italian policy community. This rich and carefully grounded study yields many insights into the interconnections between Italian and European policies and is relevant to observers and students of both European integration and comparative European politics.” – (from the Preface) Professor Helen Wallace, European University Institute

“ ... I am impressed with the balance between theory and evidence. The author situates an empirically reached narrative into a framework conversant with the most advanced literature on the politics of ideas and the role of economics in contemporary public policy. Another important result achieved by this book is that the Italian case is examined in a broad comparative framework. This will amplify the readership well beyond the narrow community of experts in Italian politics and economic policy ... This book will be well received by scholars working on comparative politics, theoretical policy analysis, European integration, and international relations.” – Professor Claudio Radaelli, University of Exeter

“This is a fascinating book which explains the mystery of the process that brought Italy into the EMU, which has puzzled many people, and which made this an excellent research topic. Italy had been unable to master economic policy for decades, so how were they able to achieve such a transformation in a few years in the 1990s? Dr. Quaglia shows that the public were persuaded that adopting a ‘European’ model was desirable and that new policies would ensure economic stability. The book reveals the interplay between pure political maneuvering and the power of ideas. The Banca d’Italia was a crucial player in this scenario, and Dr. Quaglia’s unprecedented access here and more generally in central banking circles makes this a very original piece of work.” – Dr. Peter Holmes, University of Sussex

Table of Contents

List of Abbreviations
Preface by Helen Wallace
1. Introduction
2. Ideas, Institutions and Interests
3. The Early Decades of European Monetary Cooperation: Italy as an Ambivalent Partner
4. From the EMS to the TEU: Italy as an Eager Partner
5. From the TEU to the Final Stage of the EMU: Italy as an Unsolicited Partner
6. The Final Stage of EMU: Italy in the Eurozone
7. Conclusions
Appendix: List of Interviewees

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