HOME

TheInfoList



OR:

The Treaty on European Union, commonly known as the Maastricht Treaty, is the foundation treaty of the
European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been ...
(EU). Concluded in 1992 between the then-twelve
member states A member state is a state that is a member of an international organization or of a federation or confederation. Since the World Trade Organization (WTO) and the International Monetary Fund (IMF) include some members that are not sovereign states ...
of the
European Communities The European Communities (EC) were three international organizations that were governed by the same set of institutions. These were the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EAEC or Euratom), and the E ...
, it announced "a new stage in the process of
European integration European integration is the process of industrial, economic, political, legal, social, and cultural integration of states wholly or partially in Europe or nearby. European integration has primarily come about through the European Union and it ...
" chiefly in provisions for a shared European citizenship, for the eventual introduction of a single currency, and (with less precision) for common foreign and security policies. Although these were widely seen to presage a "
federal Europe The United States of Europe (USE), the European State, the European Federation and Federal Europe, is the hypothetical scenario of the European integration leading to formation of a sovereign superstate (similar to the United States of America ...
", the focus of constitutional debate shifted to the later 2007
Treaty of Lisbon The Treaty of Lisbon (initially known as the Reform Treaty) is an international agreement that amends the two treaties which form the constitutional basis of the European Union (EU). The Treaty of Lisbon, which was signed by the EU member sta ...
. In the wake of the Eurozone debt crisis unfolding from 2009, the most enduring reference to the Maastricht Treaty has been to the rules of compliance – the "Maastricht criteria" – for the
currency union A currency union (also known as monetary union) is an intergovernmental agreement that involves two or more states sharing the same currency. These states may not necessarily have any further integration (such as an economic and monetary union, ...
. Against the background of the
end of the Cold War End, END, Ending, or variation, may refer to: End *In mathematics: ** End (category theory) ** End (topology) ** End (graph theory) ** End (group theory) (a subcase of the previous) ** End (endomorphism) *In sports and games ** End (gridiron foot ...
and the
re-unification of Germany German reunification (german: link=no, Deutsche Wiedervereinigung) was the process of re-establishing Germany as a united and fully sovereign state, which took place between 2 May 1989 and 15 March 1991. The day of 3 October 1990 when the Ge ...
, and in anticipation of accelerated
globalisation Globalization, or globalisation ( Commonwealth English; see spelling differences), is the process of interaction and integration among people, companies, and governments worldwide. The term ''globalization'' first appeared in the early 20 ...
, the treaty negotiated tensions between member states seeking deeper integration and those wishing to retain greater national control. The resulting compromise faced what was to be the first in a series of EU treaty ratification crises.


Overview

Having "resolved to continue the process of creating an ever closer union among the peoples of Europe", the Treaty proposes "further steps to be taken in order to advance European integration"TEU pp.3–4 under seven titles. Title I, Common Provisions, establishes the European Union (EU) on the foundation of the three, already partially merged, European Communities: the
European Economic Community The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lisbo ...
(EEC), the
European Coal and Steel Community The European Coal and Steel Community (ECSC) was a European organization created after World War II to regulate the coal and steel industries. It was formally established in 1951 by the Treaty of Paris, signed by Belgium, France, Italy, Lu ...
(ECSC) and the
European Atomic Energy Community The European Atomic Energy Community (EAEC or Euratom) is an international organisation established by the Euratom Treaty on 25 March 1957 with the original purpose of creating a specialist market for nuclear power in Europe, by developing nucl ...
(Euratom). It confirms among its objectives are "the introduction of a citizenship of the Union" common to the nationals of the Member States; "economic and monetary union, ultimately including a single currency"; and "a common foreign and security policy including the eventual framing of a common defence". Title II, Provisions Amending the Treaty Establishing the European Economic Community, reformulates the EEC as the central "pillar" of the Union. It amends the EEC's
Treaty of Rome The Treaty of Rome, or EEC Treaty (officially the Treaty establishing the European Economic Community), brought about the creation of the European Economic Community (EEC), the best known of the European Communities (EC). The treaty was signe ...
constitution, renaming it the
European Community The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lisbo ...
to reflect the Union's broader ambition. Amendments incorporate (as detailed in attached protocols) a staged progression toward monetary union including the price-stability-first criteria for adoption of the single currency and for the operations of the prospective European Central Bank (ECB). Other amendments create the office of
European Ombudsman The European Ombudsman is an inter-institutional body of the European Union that holds the institutions, bodies and agencies of the EU to account, and promotes good administration. The Ombudsman helps people, businesses and organisations facing ...
, expand the Structural Fund assistance to the poorer EU regions; and broaden Community competencies in education, culture, public health, consumer protection, trans-European networks, industry and the environment. In these and other areas which do not fall within Community's "exclusive competence", in accordance with "the principle of
subsidiarity Subsidiarity is a principle of social organization that holds that social and political issues should be dealt with at the most immediate or local level that is consistent with their resolution. The '' Oxford English Dictionary'' defines subsid ...
" action is to be taken only if, "by reason of the scale or effects", the objectives cannot be more "efficiently" achieved by the Member States themselves. In several of these areas, the Treaty seeks to enhance the "democratic functioning" of the institutions by conceding the directly elected
European Parliament The European Parliament (EP) is one of the legislative bodies of the European Union and one of its seven institutions. Together with the Council of the European Union (known as the Council and informally as the Council of Ministers), it adopts ...
rights not only of consultation but also of co-decision. It also grants the Parliament the power to confirm (and therefore to veto) Council nominations for the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
, the Community's secretariat. Titles III and IV amend the treaties establishing the ECSC and Euratom to complete their absorption into the structure of European Community. Title V and VI extend existing intergovernmental consultations on foreign-policy, security and defence matters, and on "cooperation in the fields of justice and home affairs." In both cases, Member States are to "inform and consult one another within the Council f Ministers, but otherwise cooperate independently of Community institutions. Title VII, Final Provisions, covers a number of anomalous issues. Provided that all Member States ratify, it rules that the Treaty should come into force on 1 January 1993. Annexed to the Treaty is a Protocol, and an Agreement, on Social Policy. With a view to ensuring that the dynamic of the European Single Market respect certain minimum social and employment protections, these allow the Council of Ministers to approve relevant proposals from the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
on the basis of a qualified majority rather than unanimous consent. The
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and Nor ...
was not a party of the Agreement on Social Policy and secured an "opt out" from the protocol. It was to do the same with respect to the ''obligation'' to enter the final, single-currency, stage of monetary union (the UK would not have to give up
Pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and t ...
).


Procedural history


Signatories

The signatory nations were represented by: * Mark Eyskens and Philippe Maystadt (Belgium) *
Uffe Ellemann-Jensen Uffe Ellemann-Jensen (, informal: ; 1 November 1941 – 18 June 2022) was a Danish politician who served as Minister for Foreign Affairs of Denmark in the Conservative-led Poul Schlüter Administration from 1982 to 1993. He was leader of the D ...
and
Anders Fogh Rasmussen Anders Fogh Rasmussen (; born 26 January 1953) is a Danish politician who was the 24th Prime Minister of Denmark from November 2001 to April 2009 and the 12th Secretary General of NATO from August 2009 to October 2014. He became CEO of politi ...
(Denmark) * Roland Dumas and Pierre Bérégovoy (France) *
Antonis Samaras Antonis Samaras ( el, Αντώνης Σαμαράς, ; born 23 May 1951) is a Greek politician who served as 14th Prime Minister of Greece from 2012 to 2015. A member of the New Democracy party, he was its president from 2009 until 2015. Samara ...
and
Efthymios Christodoulou Efthymios N. Christodoulou ( el, Ευθύμιος Ν. Χριστοδούλου; 1932) is a Greek economist and banker. Biography Christodoulou was born in 1932 in Larissa. He holds a degree from Athens College, a B.A. in Economics from Hamilton ...
(Greece) * Gerry Collins and
Bertie Ahern Bartholomew Patrick "Bertie" Ahern (born 12 September 1951) is an Irish former Fianna Fáil politician who served as Taoiseach from 1997 to 2008, Leader of Fianna Fáil from 1994 to 2008, Leader of the Opposition from 1994 to 1997, Tánaiste an ...
(Republic of Ireland) *
Gianni De Michelis Gianni De Michelis (26 November 1940 – 11 May 2019) was an Italian politician, prominent member of the Italian Socialist Party (PSI), who served as minister in many Italian governments in the 1980s and early 1990s. Biography De Michelis was b ...
and
Guido Carli Guido Carli (28 March 1914 – 23 April 1993) was an Italian banker, economist and politician. His father was the prominent fascist sociologist Filippo Carli. Biography He was the son of Filippo Carli (1876–1938), a university professor of ...
(Italy) *
Jacques Poos Jacques François Poos (3 June 1935 – 19 February 2022) was a Luxembourgish politician. Early life and education Born in 1935, in Luxembourg, Poos was a trained economist and became a doctor of economics in 1961, when he graduated from the Un ...
and
Jean-Claude Juncker Jean-Claude Juncker (; born 9 December 1954) is a Luxembourgish politician who served as the 21st Prime Minister of Luxembourg from 1995 to 2013 and 12th President of the European Commission from 2014 to 2019. He also served as Finance Minister ...
(Luxembourg) *
Hans van den Broek Henri "Hans" van den Broek (; born 11 December 1936) is a retired Dutch politician and diplomat of the defunct Catholic People's Party (KVP) and later the Christian Democratic Appeal (CDA) party and jurist who served as European Commissioner fro ...
and
Wim Kok Willem "Wim" Kok (; 29 September 1938 – 20 October 2018) was a Dutch politician and trade union leader who served as Prime Minister of the Netherlands from 22 August 1994 until 22 July 2002.João de Deus Pinheiro and
Jorge Braga de Macedo Jorge is a Spanish and Portuguese given name. It is derived from the Greek name Γεώργιος (''Georgios'') via Latin ''Georgius''; the former is derived from (''georgos''), meaning "farmer" or "earth-worker". The Latin form ''Georgius'' ...
(Portugal) *
Francisco Fernández Ordóñez Francisco Fernández Ordóñez (22 June 1930 – 7 August 1992) was a Spanish politician who was the minister of foreign affairs in the Spanish Socialist Workers' Party (PSOE) government of Felipe González from 1985 until shortly before his de ...
and Carlos Solchaga (Spain) *
Douglas Hurd Douglas Richard Hurd, Baron Hurd of Westwell, (born 8 March 1930) is a British Conservative Party politician who served in the governments of Margaret Thatcher and John Major from 1979 to 1995. A career diplomat and political secretary to ...
and
Francis Maude Francis Anthony Aylmer Maude, Baron Maude of Horsham, (born 4 July 1953) is a British Conservative Party politician and life peer who served as Minister of State for Trade and Investment from 2015 to 2016, having previously served as Minister ...
(United Kingdom) *
Hans-Dietrich Genscher Hans-Dietrich Genscher (21 March 1927 – 31 March 2016) was a German statesman and a member of the liberal Free Democratic Party (FDP), who served as Federal Minister of the Interior from 1969 to 1974, and as Federal Minister for Foreign Affa ...
and
Theo Waigel Theodor Waigel (born 22 April 1939) is a German politician of the Christian Social Union in Bavaria (CSU). He represented Neu-Ulm in the Bundestag from 1976 to 2002. Waigel is a lawyer, and earned a doctorate in 1967. He was a member of the ...
(Germany) In consequence of the
Dutch Dutch commonly refers to: * Something of, from, or related to the Netherlands * Dutch people () * Dutch language () Dutch may also refer to: Places * Dutch, West Virginia, a community in the United States * Pennsylvania Dutch Country People ...
Presidency of the Council of the European Communities during the previous six months of negotiation, the Treaty was signed in the
Netherlands ) , anthem = ( en, "William of Nassau") , image_map = , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of the Netherlands , established_title = Before independence , established_date = Spanish Neth ...
, in the city of
Maastricht Maastricht ( , , ; li, Mestreech ; french: Maestricht ; es, Mastrique ) is a city and a municipality in the southeastern Netherlands. It is the capital and largest city of the province of Limburg. Maastricht is located on both sides of the ...
. The twelve members of the European Communities signing the Treaty on 7 February 1992 were Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Portugal, Spain, the Netherlands and the United Kingdom.


Ratification

The Treaty noted that it should be "ratified by the High Contracting Parties in accordance with their respective constitutional requirement". In the cases of Denmark, France and Ireland this required referendums. In the first Danish referendum, on 2 June 1992, the treaty was rejected by a margin of 50.7% to 49.3%. Concessions secured by the end of year in
Edinburgh Edinburgh ( ; gd, Dùn Èideann ) is the capital city of Scotland and one of its 32 council areas. Historically part of the county of Midlothian (interchangeably Edinburghshire before 1921), it is located in Lothian on the southern shore of t ...
including, critically, the same exemption secured by Britain from the single currency (Denmark would not have to give up the krone), allowed for a second referendum. On 18 May 1993, Maastricht Treaty was endorsed by a vote of 56.7%. In Ireland, the Eleventh Amendment of the Constitution, allowing the state to ratify the Treaty, was approved in a referendum held on 18 June 1992 with the support of 69.1% of votes cast. In September 1992, a referendum in France narrowly supported the ratification of the treaty, with 50.8% in favour. This narrow vote for ratification in France, known at the time as the '', led
Jacques Delors Jacques Lucien Jean Delors (born 20 July 1925) is a French politician who served as the 8th President of the European Commission from 1985 to 1995. He served as Minister of Finance of France from 1981 to 1984. He was a Member of the European Par ...
to comment that "Europe began as an elitist project in which it was believed that all that was required was to convince the decision-makers. That phase of benign despotism is over." In the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and Nor ...
parliament ratification did not command a clear majority. In protest against the social-policy opt out, Labour opposed, while "anti-federalists" split the governing
Conservatives Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization ...
. Prime Minister
John Major Sir John Major (born 29 March 1943) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 1990 to 1997, and as Member of Parliament (MP) for Huntingdon, formerly Huntin ...
was able to face down his "
Maastricht Rebels The Maastricht Rebels were British Members of Parliament (MPs) belonging to the then governing Conservative Party who refused to support the government of Prime Minister John Major in a series of votes in the House of Commons on the issue of ...
" only by tying ratification to the survival of the government in a vote of confidence.


Citizenship of the European Union

From the establishment of the European Economic Community in 1957, integrationists argued the free movement of workers was the logical corollary of the free movement of capital, goods and services and integral to the establishment of a common (and later single) European market. In time, the tension between the transferred worker as "a mobile unit of production" contributing to the success of the single market, and the reality of the Community migrants as individuals, seeking to exercise "a personal right" to live and work in another state for their own, and their families', welfare, asserted itself. The Treaty built on the growing suggestion that there was a Community-wide basis for citizenship rights. The Treaty rules that "every person holding the nationality of a Member State shall be a citizen of the Union". This common and parallel citizenship accords the Member State migrants not only the civil right to take up residence and employment, but also, and for the first time, political rights. In a new EU country of residence Member-State nationals have the right to vote, and to stand, in both local and European elections. Unresolved in the Treaty is the question of their access to social rights. Political debate continued as to who should have access to public services and welfare systems funded by taxation.


Economic and monetary union


Franco-German agreement

French President The president of France, officially the president of the French Republic (french: Président de la République française), is the executive head of state of France, and the commander-in-chief of the French Armed Forces. As the presidency is ...
François Mitterrand François Marie Adrien Maurice Mitterrand (26 October 19168 January 1996) was President of France, serving under that position from 1981 to 1995, the longest time in office in the history of France. As First Secretary of the Socialist Party, he ...
was forced to abandon the centrepiece of his Socialist programme in 1983, a job creating
reflation Reflation is used to describe a return of prices to a previous rate of inflation. One usage describes an act of stimulating the economy by increasing the money supply or by reducing taxes, seeking to bring the economy (specifically the price level ...
, due to speculation against the
franc The franc is any of various units of currency. One franc is typically divided into 100 centimes. The name is said to derive from the Latin inscription ''francorum rex'' (King of the Franks) used on early French coins and until the 18th cen ...
. Since then, Mitterrand had been committed to drawing Germany into a currency partnership. After the
fall of the Berlin Wall The fall of the Berlin Wall (german: Mauerfall) on 9 November 1989, during the Peaceful Revolution, was a pivotal event in world history which marked the destruction of the Berlin Wall and the figurative Iron Curtain and one of the series of ev ...
in late 1989, Germany sought re-unification. France, the UK, and the rest of Europe expressed their concerns over re-unification. When
German Chancellor The chancellor of Germany, officially the federal chancellor of the Federal Republic of Germany,; often shortened to ''Bundeskanzler''/''Bundeskanzlerin'', / is the head of the federal government of Germany and the commander in chief of the Ge ...
Helmut Kohl Helmut Josef Michael Kohl (; 3 April 1930 – 16 June 2017) was a German politician who served as Chancellor of Germany from 1982 to 1998 and Leader of the Christian Democratic Union (CDU) from 1973 to 1998. Kohl's 16-year tenure is the longe ...
asked for re-unification in 1990, Mitterrand would only accept in the event Germany would abandon the Deutsche Mark and adopt a common currency. Without consulting Karl Otto Pöhl, President of the
Bundesbank The Deutsche Bundesbank (), literally "German Federal Bank", is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks (ESCB). Due to its strength and former size, the Bundesbank is the mos ...
, Kohl accepted the deal. Despite this win for France, it was widely perceived that the cost of German cooperation was German dictation of the rules for a single currency. The Bundesbank had signalled that Germany's economic success would come before being "a good european".


The ERM crises

In Britain the Maastricht rebellion drew on the experience of
Black Wednesday Black Wednesday (or the 1992 Sterling crisis) occurred on 16 September 1992 when the UK Government was forced to withdraw sterling from the European Exchange Rate Mechanism (ERM), after a failed attempt to keep its exchange rate above the ...
. On 16 September 1992 the
British government ga, Rialtas a Shoilse gd, Riaghaltas a Mhòrachd , image = HM Government logo.svg , image_size = 220px , image2 = Royal Coat of Arms of the United Kingdom (HM Government).svg , image_size2 = 180px , caption = Royal Arms , date_es ...
had been forced to withdraw the
pound sterling Sterling (abbreviation: stg; Other spelling styles, such as STG and Stg, are also seen. ISO code: GBP) is the currency of the United Kingdom and nine of its associated territories. The pound ( sign: £) is the main unit of sterling, and t ...
from the
European Exchange Rate Mechanism The European Exchange Rate Mechanism (ERM II) is a system introduced by the European Economic Community on 1 January 1999 alongside the introduction of a single currency, the euro (replacing ERM 1 and the euro's predecessor, the ECU) as p ...
(ERM), after a failed and costly attempt to keep the pound above its mandated
exchange rate In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...
limit. Sterling's release from the ERM was then followed in the UK by an economic recovery and a significant fall in unemployment. The ERM was the centrepiece of the
European Monetary System The European Monetary System (EMS) was a multilateral adjustable exchange rate agreement in which most of the nations of the European Economic Community (EEC) linked their currencies to prevent large fluctuations in relative value. It was initiate ...
(EMS), set up on voluntary basis in 1978 to reduce the "barrier" that exchange-rate volatility presented for intra-Community commerce (and for the management of payments under the
Common Agricultural Policy The Common Agricultural Policy (CAP) is the agricultural policy of the European Union. It implements a system of agricultural subsidies and other programmes. It was introduced in 1962 and has since then undergone several changes to reduce t ...
). Britain had signed up to the ERM in 1990 as a token of the government's commitment to control inflation (then running at three times the rate of Germany). From the beginning of 1990, high German
interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
s, set by the
Bundesbank The Deutsche Bundesbank (), literally "German Federal Bank", is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks (ESCB). Due to its strength and former size, the Bundesbank is the mos ...
to counteract inflationary impact of the expenditure on German reunification, caused significant stress across the whole of the ERM. By the time of their own ratifications debates, France and Denmark also found themselves under pressure in foreign exchange markets, their currencies trading close to the bottom of their ERM bands.


The Maastricht criteria

Having "resolved to achieve the strengthening and the convergence and to establish an economic and monetary union including,... a single and stable currency", the Treaty ruled that "Member States shall regard their economic policies as a matter of common concern", and that the obligations assumed should be a matter for "mutual surveillance." Commonly known as the Maastricht criteria, these obligations represented the performance thresholds for member states to progress toward the third stage of European
Economic and Monetary Union An economic and monetary union (EMU) is a type of trade bloc that features a combination of a common market, customs union, and monetary union. Established via a trade pact, an EMU constitutes the sixth of seven stages in the process of economic ...
(EMU), the adoption the common currency (designated at the 1995
Madrid Madrid ( , ) is the capital and most populous city of Spain. The city has almost 3.4 million inhabitants and a metropolitan area population of approximately 6.7 million. It is the second-largest city in the European Union (EU), and ...
European as the
Euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens ...
). The four "convergence criteria", as detailed in attached protocols, impose control over inflation, public debt and the public deficit, exchange rate stability and domestic interest rates. With limited leeway granted in exceptional circumstances, the obligations are to maintain: 1.
Inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reducti ...
at a rate no more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) Member States; 2. a "budgetary position" that avoids "excessive" government deficits defined in ratios to gross domestic product (GDP) of greater than 3% for annual deficits and 60% for gross
government debt A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit o ...
; 3. the
exchange rate In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of ...
of the national currency within "the normal fluctuation margins by the exchange-rate mechanism of the
European Monetary System The European Monetary System (EMS) was a multilateral adjustable exchange rate agreement in which most of the nations of the European Economic Community (EEC) linked their currencies to prevent large fluctuations in relative value. It was initiate ...
without severe tensions for at least the last two years"; and 4. nominal long-term
interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, th ...
s no more than 2 percentage points higher than in the three Member States with the lowest inflation.


The European Central Bank mandate

These criteria in turn dictated the mandate of the
European System of Central Banks The European System of Central Banks (ESCB) is an institution that comprises the European Central Bank (ECB) and the national central banks (NCBs) of all 27 member states of the European Union (EU). Its objective is to ensure price stability t ...
comprising the national central banks, but to include the prospective currency-issuing
European Central Bank The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's most important central b ...
. As envisaged by the Treaty, the ECB replaced its shadow
European Monetary Institute The European Monetary Institute (EMI) was the forerunner of the European Central Bank (ECB), operating between 1994 and 1997. History The EMI was created 1 January 1994 to oversee the second stage in the creation of monetary union. The EMI itself ...
on 1 June 1998, and began exercising its full powers with the introduction of the euro on 1 January 1999. The Treaty dedicates the EU central banking system to price stability, and gives it "a degree of independence from elected officials" greater even "than that of its putative model, the German
Bundesbank The Deutsche Bundesbank (), literally "German Federal Bank", is the central bank of the Federal Republic of Germany and as such part of the European System of Central Banks (ESCB). Due to its strength and former size, the Bundesbank is the mos ...
". Whereas the Bundesbank, under article 12 of its constitution, is "bound to support the general economic policy of the ermanFederal Government", the obligation of the ECB to "support the general economic policies in the Community" is to be "without prejudice" to price stability, the Bank's "primary objective". It is further conditioned by the express understanding that "neither the ECB, nor a national central bank, nor any member of their decision-making bodies, shall seek or take instructions from Community institutions or bodies from any Government of a Member State or from any other body." Seeming to further preclude any possibility of the single-currency banking system being used to regulate European financial markets in support of expansionary – potentially inflationary – policies, the Treaty expressly prohibits the ECB or any Member State central extending "overdraft facilities or any other type of credit facility" to "Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States", or the purchase from them debt instruments.


The Maastricht economic-policy model

In ruling out any role for the future ECB and euro in national, or Union-coordinated, reflationary policies Maastricht affirmed what by the late 1980s was the general economic-policy orthodoxy within the Community. This has been described as a "reversed
Keynesianism Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output a ...
": macro-economic policy not to secure a full-employment level of demand, but, through the restrictive control of monetary growth and public expenditure, to maintain price and financial market stability; micro economic policy, not to engineer income and price controls in support of fiscal expansion, but to encourage job creation by reducing barriers to lower labour costs. The commitment to monetary union and the convergence criteria denied member states the resort to currency deflation to ease balance-of-payments constraints on domestic spending, and left labour market "flexibility" as the only means of coping with asymmetric economic shocks. These constraints were to become the focus of political scrutiny and public protest in the new-century
European debt crisis The European debt crisis, often also referred to as the eurozone crisis or the European sovereign debt crisis, is a multi-year debt crisis that took place in the European Union (EU) from 2009 until the mid to late 2010s. Several eurozone membe ...
. Beginning in 2009 with
Greece Greece,, or , romanized: ', officially the Hellenic Republic, is a country in Southeast Europe. It is situated on the southern tip of the Balkans, and is located at the crossroads of Europe, Asia, and Africa. Greece shares land borders with ...
, the governments of several Euro-zone countries (
Portugal Portugal, officially the Portuguese Republic ( pt, República Portuguesa, links=yes ), is a Sovereign state, country whose mainland is located on the Iberian Peninsula of Southern Europe, Southwestern Europe, and whose territory also includes ...
,
Ireland Ireland ( ; ga, Éire ; Ulster-Scots: ) is an island in the North Atlantic Ocean, in north-western Europe. It is separated from Great Britain to its east by the North Channel, the Irish Sea, and St George's Channel. Ireland is the s ...
,
Spain , image_flag = Bandera de España.svg , image_coat = Escudo de España (mazonado).svg , national_motto = ''Plus ultra'' (Latin)(English: "Further Beyond") , national_anthem = (English: "Royal March") , i ...
and Cyprus) declared themselves unable to repay or refinance their
government debt A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit o ...
or to bail out over-indebted banks without assistance from third parties. The "
austerity Austerity is a set of political-economic policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. There are three primary types of austerity measures: higher taxes to fund spend ...
" they had subsequently to impose as a condition of assistance from Germany and other of their trade-surplus EU partners, raised calls for new arrangements to better manage payment imbalances between member states, and ease the burden of adjustment upon wage-, and benefit-, dependent households. Greek finance minister
Yanis Varoufakis Ioannis "Yanis" Varoufakis ( el, Ιωάννης Γεωργίου "Γιάνης" Βαρουφάκης, Ioánnis Georgíou "Giánis" Varoufákis, ; born 24 March 1961) is a Greek economist and politician. A former academic, he served as the Gree ...
credited the Maastricht criteria with framing of a union of deflation and unemployment. Taking issue in defence of the Maastricht criteria, German finance minister Wolfgang Schäuble argued that "the old way to stimulate growth will not work." There is a real "moral hazard" in allowing Member States to accumulate higher debts within the Eurozone – higher debts which, ultimately, have no relationship to higher growth. The Maastricht criteria, he insisted, were correct in placing the onus for growth on "competitiveness, structural reforms, investment, and sustainable financing".


Foreign and security policy, justice and home affairs

Set alongside the European Community, the cooperation proposed in the Maastricht Treaty on foreign and security policy, and on justice and home affairs, were characterised in official commentary as the second and third "pillars" of the Union. The Treaty, however, proposed no significant departures in these areas. Coordination in foreign and security policy had taken place since the beginning of the 1970s under the name of
European Political Cooperation __NOTOC__ The European Political Co-operation (EPC) was introduced in 1970 and was the synonym for European Union foreign policy coordination until it was superseded by the Common Foreign and Security Policy in the Maastricht Treaty of November ...
(EPC), which had been first written into the treaties by the 1987
Single European Act The Single European Act (SEA) was the first major revision of the 1957 Treaty of Rome. The Act set the European Community an objective of establishing a single market by 31 December 1992, and a forerunner of the European Union's Common Foreign ...
. Cooperation on law enforcement,
criminal justice Criminal justice is the delivery of justice to those who have been accused of committing crimes. The criminal justice system is a series of government agencies and institutions. Goals include the rehabilitation of offenders, preventing othe ...
, asylum, and immigration and other judicial matters was being pursued under the 1990
Schengen Agreement The Schengen Agreement ( , ) is a treaty which led to the creation of Europe's Schengen Area, in which internal border checks have largely been abolished. It was signed on 14 June 1985, near the town of Schengen, Luxembourg, by five of the te ...
and Convention. The new provisions called on governments to "inform and consult one another within the Council of Ministers", but otherwise continued cooperation on the basis of intergovernmental liaison outside of the EC and its institutions. The West European Union, an until recently moribund club within
NATO The North Atlantic Treaty Organization (NATO, ; french: Organisation du traité de l'Atlantique nord, ), also called the North Atlantic Alliance, is an intergovernmental military alliance between 30 member states – 28 European and two Nor ...
, is described as "an integral part of the development of the Union", and asked it to help "elaborate and implement decisions and actions of the Union which have defence implications. Yet it is clear that nothing is to be construed as systematically constraining the foreign or defence policies of the individual Member States. "Failing a Council decision", which would require unanimity, a Member State is free to take such action as it considers "necessary". This, in part, was a concession to United Kingdom which continued to insist on the sufficiency of the North Atlantic alliance (supported by the neutral, non-aligned, Member States, the
Republic of Ireland Ireland ( ga, Éire ), also known as the Republic of Ireland (), is a country in north-western Europe consisting of 26 of the 32 counties of the island of Ireland. The capital and largest city is Dublin, on the eastern side of the island. ...
and
Austria Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous c ...
, at the 1997 Amsterdam summit the UK prevented a merger of the WEU and the EU),


Subsidiarity and co-decision

As an implicit presumption
subsidiarity Subsidiarity is a principle of social organization that holds that social and political issues should be dealt with at the most immediate or local level that is consistent with their resolution. The '' Oxford English Dictionary'' defines subsid ...
may have been considered a check upon the supranational development of the EEC. But in making it an explicit constitutional principle the Maastricht Treaty opened up "debates about whether this strengthened the states, regions or local government vis-à-vis the EU or vice versa". Subsidiarity can be read as a federalising principle. For every endeavour it poses the question of whether national or Community policy is the most effective means, and elevates simple utility above any deference to national or local feeling. Sceptics note that the Treaty offers no legally actionable definition of subsidiarity. Rather there are "a series of tentative indications for Community action in a document full of imprecise concepts: 'sufficiently', 'better achieved', 'what is necessary', 'to achieve the objectives', subjective notions which leave the way wide open for interpretation or practical developments." Jacques Santer, Prime Minister of Luxembourg, conceded that consensus around the principle of subsidiarity had been possible only because "it conceals different interpretations".Jacques Santer, Prime Minister of Luxembourg. Introduction to the Jacques Delors Colloquium 1991: "Subsidiarity: the challenge of change" organised by the European Institute of Public Administration at Maastricht, 21 and 22 March 1991, p. 32. The 1992 Treaty may have introduced a more consequential constitutional principle in its promotion "co-decision". It introduced procedures that made the
European Parliament The European Parliament (EP) is one of the legislative bodies of the European Union and one of its seven institutions. Together with the Council of the European Union (known as the Council and informally as the Council of Ministers), it adopts ...
"co-legislator with the Council of Ministers" and have since been developed and extended to nearly all areas where the Council decides by qualified majority voting. The "foundations of co-decision in the Maastricht Treaty" have led to the "trialogues" involving the European Parliament, Council and Commission, which have become standard legislative practice.


Amending Treaties

In establishing the European Union the Maastricht Treaty amended the treaties that had established the European Communities in the 1950s. Following the EU accessions of Austria, Finland, and Sweden, it was in turn amended by the treaties of Amsterdam (1997), and Nice (2001). Following the accession of a further twelve states, ten from the former
Eastern Bloc The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed d ...
– Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia – plus Cyprus and Malta, and an aborted Treaty on a European Constitution, Maastricht was more comprehensively revisited. The 2007
Lisbon Lisbon (; pt, Lisboa ) is the capital and largest city of Portugal, with an estimated population of 544,851 within its administrative limits in an area of 100.05 km2. Lisbon's urban area extends beyond the city's administrative limits w ...
amends and incorporates the Maastricht Treaty as the
Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU). It was previously known as the Treaty Establishi ...
.


Timeline


See also

*
Treaties of the European Union The Treaties of the European Union are a set of international treaties between the European Union (EU) member states which sets out the EU's constitutional basis. They establish the various EU institutions together with their remit, procedures ...
**
Treaty on European Union The Treaty on European Union (2007) is one of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union (TFEU). The TEU form the basis of EU law, by setting out general principles of the EU's pu ...
**
Treaty on the Functioning of the European Union The Treaty on the Functioning of the European Union (TFEU) is one of two treaties forming the constitutional basis of the European Union (EU), the other being the Treaty on European Union (TEU). It was previously known as the Treaty Establishi ...


Notes


Further reading

* * * * * * * * * *


External links

*
Full text of the treaty at EUR-LexThe Treaty on European Union, signed at Maastricht on 7 February 1992
– Original version

CVCE
Proposed 1962 treaty establishing a "European Union"
CVCE
The Treaty on European Union
– Current consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union
in PDF
{{Authority control Treaty on European Union Euro European integration European Commission European Parliament Monetary policy Treaties concluded in 1992 Treaties entered into force in 1992 Treaties of Belgium Treaties of Denmark Treaties of France Treaties of Germany Treaties of Greece Treaties of Ireland Treaties of Italy Treaties of Luxembourg Treaties of the Netherlands Treaties of Portugal Treaties of Spain Treaties of the United Kingdom History of Maastricht