Maastricht Treaty (1992): The Birth of the European Union

The Maastricht Treaty, formally the Treaty on European Union, was signed on 7 February 1992 in the Dutch city of Maastricht by the twelve member states of the European Community. It created the European Union, introduced EU citizenship and laid down the rules and timetable for a single European currency. After bitter ratification battles it came into force on 1 November 1993, and it remains the founding text of the EU as it exists today.

Background: from common market to union

European integration had begun with the European Coal and Steel Community in 1951 and the Treaty of Rome of 1957, which set up the European Economic Community. By the late 1980s the Community had twelve members and was working to complete a genuine single market under the Single European Act of 1986.

The Commission president Jacques Delors argued that a single market needed a single currency. In 1989 a committee he chaired produced the Delors Report, which proposed economic and monetary union (EMU) in three stages. The first stage, freeing capital movements, began on 1 July 1990.

Then the map of Europe changed. The fall of the Berlin Wall in November 1989 and the prospect of German reunification raised fears, especially in France, of a dominant Germany. The German chancellor Helmut Kohl and the French president François Mitterrand responded by pushing for deeper integration that would bind a united Germany firmly into Europe. Monetary union and a stronger “political union” became two halves of the same project.

Negotiation

In December 1990 the member states opened two intergovernmental conferences in Rome, one on economic and monetary union and one on political union. The talks lasted a year and covered the powers of the European Parliament, foreign policy, social policy, policing and immigration, as well as the design of a central bank.

The decisive summit took place at the Maastricht European Council on 9–10 December 1991, under the Dutch presidency of Prime Minister Ruud Lubbers. The British government of John Major, sceptical of both a single currency and common social legislation, secured two important exceptions. The United Kingdom gained the right not to join the third stage of monetary union, and it stayed out of the Social Chapter, which was moved into a separate protocol for the other eleven states.

Other states also won concessions. Spain, led by Prime Minister Felipe González, together with Portugal, Greece and Ireland, argued that poorer members would struggle to meet the demands of monetary union. The treaty therefore provided for a new Cohesion Fund to finance transport and environmental projects in those countries, which was set up in 1994. Germany, for its part, insisted on strict budget rules and an independent central bank as the price of giving up the Deutsche Mark.

After legal drafting, foreign and finance ministers signed the treaty in the provincial government building in Maastricht on 7 February 1992.

What the treaty created

The treaty built a new European Union on three “pillars”:

• The European Communities, the existing supranational system run by the Commission, Council, Parliament and Court of Justice. The European Economic Community was renamed simply the European Community.
• A Common Foreign and Security Policy, under which governments coordinated foreign policy, largely by unanimity.
• Cooperation in Justice and Home Affairs, covering asylum, immigration, policing and judicial cooperation, also mainly between governments.

It introduced citizenship of the Union for every national of a member state. EU citizens gained the right to move and live freely throughout the Union and to vote and stand in local and European Parliament elections in the member state where they live, as well as a right to petition the European Parliament and access to a new European Ombudsman.

The European Parliament gained real legislative power through a new “co-decision” procedure in certain areas, giving it the right to block laws. The treaty set up the Committee of the Regions and wrote the principle of subsidiarity into EU law: the Union should act only when goals cannot be achieved better at national or local level.

The road to the euro

The economic heart of Maastricht was a detailed plan for monetary union. Stage two, from 1 January 1994, created the European Monetary Institute as the forerunner of a European Central Bank. Stage three, with irrevocably fixed exchange rates and a single currency, was to start in 1997 if a majority of states were ready, and no later than 1 January 1999 in any case.

To join, a country had to meet the convergence criteria:

The treaty also made the future European Central Bank independent of governments, with price stability as its primary goal, a model strongly influenced by Germany’s Bundesbank.

The ratification battles

Ratification proved far harder than signature. On 2 June 1992 Danish voters rejected the treaty by about 50.7 percent to 49.3 percent, a shock that threw the whole project into doubt. Irish voters approved it comfortably later that month.

France held its own referendum on 20 September 1992. After a heated campaign, the “yes” side won with only about 51 percent, a result the French called the petit oui, or “little yes”. The vote came days after the currency crisis of “Black Wednesday”, 16 September 1992, when Britain and Italy were forced out of the Exchange Rate Mechanism.

At a summit in Edinburgh in December 1992, the other member states agreed that Denmark could opt out of the single currency, common defence policy, aspects of justice and home affairs and parts of Union citizenship. With these guarantees Danish voters approved the treaty in a second referendum on 18 May 1993 by about 57 percent.

In the United Kingdom, where there was no referendum, John Major’s Conservative government faced a long rebellion by Eurosceptic backbenchers known as the “Maastricht rebels”. He had to call a confidence vote in July 1993 to secure passage. In Germany the Federal Constitutional Court heard a challenge and ruled on 12 October 1993 that the treaty was compatible with the German Basic Law, while setting limits on further transfers of power. Germany’s ratification was the last, and the treaty entered into force on 1 November 1993.

Key people

• Jacques Delors, President of the European Commission (1985–1995), was the driving force behind monetary union.
• Helmut Kohl, the German chancellor, saw European union as the guarantee for a reunited Germany.
• François Mitterrand, the French president, championed the treaty and staked his authority on the 1992 referendum.
• John Major, the British prime minister, negotiated Britain’s opt-outs and fought the treaty through Parliament.
• Ruud Lubbers, the Dutch prime minister, chaired the Maastricht summit.

Consequences

The treaty transformed the European Community into a broader political union. Austria, Finland and Sweden joined the new EU in 1995. Monetary union went ahead on schedule: on 1 January 1999, eleven countries adopted the euro as their currency for accounting and financial markets, and euro notes and coins replaced national money in 2002. The introduction of the euro was the most visible result of Maastricht.

The treaty also opened a long period of treaty reform. The Treaties of Amsterdam (1997) and Nice (2001) adjusted the institutions and prepared for enlargement to the east. The Lisbon Treaty, in force from 2009, abolished the pillar structure but kept the Treaty on European Union as one of the EU’s two core treaties.

Legacy and debate

Maastricht is often seen as the moment when European integration moved from economics into politics and became controversial with voters. The narrow referendums of 1992 ended an era in which integration had mostly been a matter for elites, and debates about sovereignty and democratic legitimacy have followed the EU ever since.

The design of the single currency has also been debated. Critics argued that a monetary union without a common budget left it exposed to shocks, a weakness highlighted by the eurozone debt crisis after 2009. Supporters point out that the euro has become the world’s second most important reserve currency and that the citizenship rights created at Maastricht are used daily by millions of people living, working and studying in other member states.

Timeline

• 1989, April: The Delors Report proposes economic and monetary union in three stages.
• 1990, 15 December: Intergovernmental conferences on monetary and political union open in Rome.
• 1991, 9–10 December: EC leaders agree the treaty at the Maastricht European Council.
• 1992, 7 February: The Treaty on European Union is signed in Maastricht.
• 1992, 2 June: Danish voters reject the treaty in a referendum.
• 1992, 20 September: French voters narrowly approve the treaty.
• 1992, December: The Edinburgh summit grants Denmark special opt-outs.
• 1993, 18 May: Denmark approves the treaty in a second referendum.
• 1993, 12 October: Germany’s Constitutional Court clears the way for ratification.
• 1993, 1 November: The treaty enters into force and the European Union is born.

Why it matters

The Maastricht Treaty created the European Union, the euro’s legal framework and the idea of a European citizenship. It shaped the political and economic life of hundreds of millions of people and set the terms of the debate about how much power nations should share in Europe.