Home      Discussion      Topics      Dictionary      Almanac
Signup       Login
Maastricht Treaty

Maastricht Treaty

Discussion
Ask a question about 'Maastricht Treaty'
Start a new discussion about 'Maastricht Treaty'
Answer questions from other users
Full Discussion Forum
 
Encyclopedia
For the content of the treaty as of 2009, see Treaties of the European Union#Treaty on European Union

The Maastricht Treaty (formally, the Treaty on European Union or TEU) was signed on 7 February 1992 by the members of the European Community
European Communities
The European Communities were three international organisations that were governed by the same set of institutions...

 in Maastricht
Maastricht
Maastricht is situated on both sides of the Meuse river in the south-eastern part of the Netherlands, on the Belgian border and near the German border...

, Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

. On 9–10 December 1991, the same city hosted the European Council
European Council
The European Council is an institution of the European Union. It comprises the heads of state or government of the EU member states, along with the President of the European Commission and the President of the European Council, currently Herman Van Rompuy...

 which drafted the treaty. Upon its entry into force on 1 November 1993 during the Delors Commission
Delors Commission
The Delors Commission was the administration of Jacques Delors, the 8th President of the European Commission. Delors presided over the European Commission for three terms The Delors Commission was the administration of Jacques Delors, the 8th President of the European Commission. Delors presided...

, it created the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 and led to the creation of the single European currency, the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

. The Maastricht Treaty has been amended to a degree by later treaties. For details on the content of the treaty as amended by Amsterdam, Nice and Lisbon, see the treaties of the European Union
Treaties of the European Union
The Treaties of the European Union are a set of international treaties between the European Union member states which sets out the EU's constitutional basis. They establish the various EU institutions together with their remit, procedures and objectives...

 article.

Content


The treaty led to the creation of the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

, and created what was commonly referred to as the pillar structure of the European Union
Three pillars of the European Union
Between 1993 and 2009, the European Union legally consisted of three pillars. This structure was introduced with the Treaty of Maastricht on 1 November 1993, and was eventually abandoned on 1 December 2009 with the entry into force of the Treaty of Lisbon, when the EU obtained a consolidated legal...

. This conception of the Union divided it into the European Community (EC) pillar, the Common Foreign and Security Policy
Common Foreign and Security Policy
The Common Foreign and Security Policy is the organised, agreed foreign policy of the European Union for mainly security and defence diplomacy and actions. CFSP deals only with a specific part of the EU's external relations, which domains include mainly Trade and Commercial Policy and other areas...

 (CFSP) pillar, and the Justice and Home Affairs (JHA) pillar. The first pillar was where the EU's supra-national institutions — the Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....

, the European Parliament
European Parliament
The European Parliament is the directly elected parliamentary institution of the European Union . Together with the Council of the European Union and the Commission, it exercises the legislative function of the EU and it has been described as one of the most powerful legislatures in the world...

 and the European Court of Justice
European Court of Justice
The Court can sit in plenary session, as a Grand Chamber of 13 judges, or in chambers of three or five judges. Plenary sitting are now very rare, and the court mostly sits in chambers of three or five judges...

 — had the most power and influence. The other two pillars were essentially more intergovernmental in nature with decisions being made by committees composed of national politicians and officials.

All three pillars were the extensions of pre-existing policy structures. The European Community pillar was the continuation of the European Economic Community
European Economic Community
The European Economic Community The European Economic Community (EEC) The European Economic Community (EEC) (also known as the Common Market in the English-speaking world, renamed the European Community (EC) in 1993The information in this article primarily covers the EEC's time as an independent...

 with the "Economic" being dropped from the name to represent the wider policy base given by the Maastricht Treaty. Coordination in foreign policy had taken place since the beginning of the 1970s under the name of European Political Cooperation
European political cooperation
The European Political Cooperation 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 ....

 (EPC), which had been first written into the treaties by the Single European Act
Single European Act
The Single European Act 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 codified European Political Cooperation, the forerunner of the European Union's Common Foreign and Security Policy...

 but not as a part of the EEC. While the Justice and Home Affairs pillar extended cooperation in law enforcement, criminal justice, asylum, and immigration and judicial cooperation in civil matters, some of these areas had already been subject to intergovernmental cooperation under the Schengen Implementation Convention of 1990.

The creation of the pillar system was the result of the desire by many member states to extend the European Economic Community to the areas of foreign policy, military, criminal justice, judicial cooperation, and the misgiving of other member states, notably the United Kingdom, over adding areas which they considered to be too sensitive to be managed by the supra-national mechanisms of the European Economic Community. The compromise was that instead of renaming the European Economic Community as the European Union, the treaty would establish a legally separate European Union comprising the renamed European Economic Community, and the inter-governmental policy areas of foreign policy, military, criminal justice, judicial cooperation. The structure greatly limited the powers of the European Commission, the European Parliament and the European Court of Justice to influence the new intergovernmental policy areas, which were to be contained with the second and third pillars: foreign policy and military matters (the CFSP pillar) and criminal justice and cooperation in civil matters (the JHA pillar).

The Maastricht criteria


The Maastricht criteria (also known as the convergence criteria
Convergence criteria
The euro convergence criteria are the criteria for European Union member states to enter the third stage of European Economic and Monetary Union and adopt the euro as their currency...

) are the criteria for European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

 member states to enter the third stage of European Economic and Monetary Union
Economic and Monetary Union of the European Union
The Economic and Monetary Union is an umbrella term for the group of policies aimed at converging the economies of members of the European Union in three stages so as to allow them to adopt a single currency, the euro. As such, it is largely synonymous with the eurozone.All member states of the...

 (EMU) and adopt the euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...

 as their currency. The 4 main criteria are based on Article 121(1) of the European Community Treaty.

1. Inflation rate
Inflation rate
In economics, the inflation rate is a measure of inflation, the rate of increase of a price index . It is the percentage rate of change in price level over time. The rate of decrease in the purchasing power of money is approximately equal.The inflation rate is used to calculate the real interest...

s:

No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU.

2. Government finance:
Annual government deficit:
The ratio of the annual government deficit to gross domestic product
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

 (GDP) must not exceed 3% at the end of the preceding fiscal year. If not, it is at least required to reach a level close to 3%. Only exceptional and temporary excesses would be granted for exceptional cases.

Government debt:
The ratio of gross government debt
Government debt
Government debt is money owed by a central government. In the US, "government debt" may also refer to the debt of a municipal or local government...

 to GDP must not exceed 60% at the end of the preceding fiscal year. Even if the target cannot be achieved due to the specific conditions, the ratio must have sufficiently diminished and must be approaching the reference value at a satisfactory pace. As of the end of 2010, only two EU member states, Poland
Poland
Poland , officially the Republic of Poland , is a country in Central Europe bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north...

 and the Czech Republic
Czech Republic
The Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest....

, still meet this target.


3. Exchange rate
Exchange rate
In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

:

Applicant countries should have joined the exchange-rate mechanism
European Exchange Rate Mechanism
The European Exchange Rate Mechanism, ERM, was a system introduced by the European Community in March 1979, as part of the European Monetary System , to reduce exchange rate variability and achieve monetary stability in Europe, in preparation for Economic and Monetary Union and the introduction of...

 (ERM II) under the European Monetary System
European Monetary System
There are three stages of monetary cooperation in the European Union.-Background:European currency exchange rate stability has been one of the most important objectives of European policy makers at least since the Second World War....

 (EMS) for two consecutive years and should not have devalued its currency during the period.

4. Long-term interest rate
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...

s:

The nominal long-term interest rate must not be more than 2 percentage points higher than in the three lowest inflation member states.

The purpose of setting the criteria is to maintain the price stability within the Eurozone even with the inclusion of new member states.

Signing


The signing of the Treaty of Maastricht took place in Maastricht
Maastricht
Maastricht is situated on both sides of the Meuse river in the south-eastern part of the Netherlands, on the Belgian border and near the German border...

, Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

 on 7 February 1992. The Dutch government
Politics of the Netherlands
The politics of the Netherlands take place within the framework of a parliamentary representative democracy, a constitutional monarchy and a decentralised unitary state. The Netherlands is described as a consociational state...

, by virtue of holding Presidency of the Council of the European Union
Presidency of the Council of the European Union
The Presidency of the Council of the European Union is the responsibility for the functioning of the Council of the European Union that rotates between the member states of the European Union every six months. The presidency is not a single president but rather the task is undertaken by a national...

 during the negotiations in the second half of 1991, arranged a ceremony inside the government buildings of the Limburg
Limburg (Netherlands)
Limburg is the southernmost of the twelve provinces of the Netherlands. It is located in the southeastern part of the country and bordered by the province of Gelderland to the north, Germany to the east, Belgium to the south and part of the west, andthe Dutch province of North Brabant partly to...

 province on the river of Meuse
Meuse River
The Maas or Meuse is a major European river, rising in France and flowing through Belgium and the Netherlands before draining into the North Sea...

. Representatives from the twelve member states
Member State of the European Union
A member state of the European Union is a state that is party to treaties of the European Union and has thereby undertaken the privileges and obligations that EU membership entails. Unlike membership of an international organisation, being an EU member state places a country under binding laws in...

 of the European Communities
European Communities
The European Communities were three international organisations that were governed by the same set of institutions...

 were present, and signed Treaty as plenipotentiaries
Plenipotentiary
The word plenipotentiary has two meanings. As a noun, it refers to a person who has "full powers." In particular, the term commonly refers to a diplomat fully authorized to represent his government as a prerogative...

, marking the conclusion of the period of negotiations.

Ratification


The process of ratifying the treaty was fraught with difficulties in three states. Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...

 first rejected the treaty
Danish Maastricht Treaty referendum, 1992
A referendum on the Maastricht Treaty was held in Denmark on 2 June 1992. It was rejected by 50.7% of voters with a turnout of 83.1%. The rejection was considered somewhat of a blow to the process of European integration, although the process continued...

 on 2 June 1992 by fewer than 50,000 votes in a referendum. In September 1992, a referendum in France
French Maastricht Treaty referendum, 1992
A referendum on the Maastricht Treaty was held in France on 20 September 1992. It was approved by just over 51% of the voters. The result of the referendum, known as the "petit oui", along with the Danish "No" vote are considered to be signals of the end of the "permissive consensus" on European...

 only narrowly supported the ratification of the treaty, with 51.05% in favour. Uncertainty over the Danish and French referendums was one of the causes of the turmoil on the currency markets in September 1992, which led to the UK pound's expulsion from the Exchange Rate Mechanism. The treaty was eventually ratified
Danish Maastricht Treaty referendum, 1993
A second referendum on the Maastricht Treaty was held in Denmark on 18 May 1993. After rejecting the treaty in a referendum the previous year, this time it was approved by 56.7% of voters with an 86.5% turnout.-Background:...

 by Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...

 on 18 May 1993 with the addition of the Edinburgh Agreement
Edinburgh Agreement
The Edinburgh Agreement or Edinburgh Decision is a December 1992 agreement reached at a European Council meeting in Edinburgh, UK, that granted Denmark four exceptions to the Maastricht Treaty so that it could be ratified by Denmark. This was necessary because, without all member states of the...

 which lists four Danish exceptions.

In the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

, an opt-out from the treaty's social provisions was opposed in Parliament
Parliament of the United Kingdom
The Parliament of the United Kingdom of Great Britain and Northern Ireland is the supreme legislative body in the United Kingdom, British Crown dependencies and British overseas territories, located in London...

 by the opposition Labour
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...

 and Liberal Democrat
Liberal Democrats
The Liberal Democrats are a social liberal political party in the United Kingdom which supports constitutional and electoral reform, progressive taxation, wealth taxation, human rights laws, cultural liberalism, banking reform and civil liberties .The party was formed in 1988 by a merger of the...

 MPs and the treaty itself by the Maastricht Rebels
Maastricht Rebels
The Maastricht Rebels were British Members of Parliament belonging to the then governing Conservative Party who refused to support the government of John Major in a series of votes in the House of Commons on the issue of the implementation of the Maastricht Treaty in British law.The Maastrict...

 within the governing Conservative Party
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...

. The number of rebels exceeded the Conservative majority in the House of Commons
British House of Commons
The House of Commons is the lower house of the Parliament of the United Kingdom, which also comprises the Sovereign and the House of Lords . Both Commons and Lords meet in the Palace of Westminster. The Commons is a democratically elected body, consisting of 650 members , who are known as Members...

, and thus the government of John Major
John Major
Sir John Major, is a British Conservative politician, who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 1990–1997...

 came close to losing the confidence
1993 vote of confidence in the government of John Major
The 1993 confidence motion in John Major's government was an explicit confidence motion in the Conservative government of John Major which was proposed in order to ensure support in Parliament for the passing of the Maastricht Treaty...

 of the House.

See also


  • Treaty of Rome
    Treaty of Rome
    The Treaty of Rome, officially the Treaty establishing the European Economic Community, was an international agreement that led to the founding of the European Economic Community on 1 January 1958. It was signed on 25 March 1957 by Belgium, France, Italy, Luxembourg, the Netherlands and West Germany...

     (1957)
  • Treaty of Amsterdam (1997)
  • Treaty of Nice
    Treaty of Nice
    The Treaty of Nice was signed by European leaders on 26 February 2001 and came into force on 1 February 2003. It amended the Maastricht Treaty and the Treaty of Rome...

     (2001)
  • Treaty of Lisbon
    Treaty of Lisbon
    The Treaty of Lisbon of 1668 was a peace treaty between Portugal and Spain, concluded at Lisbon on 13 February 1668, through the mediation of England, in which Spain recognized the sovereignty of Portugal's new ruling dynasty, the House of Braganza....

    (2007)

External links