A Critical Analysis Of The Maasticht Treaty Politics Essay

Following the effects of World War II, the Leaders of the world came together with the goal of ensuring that the destruction and devastation seen during that war would never happen again. In order to realize this one of their primary goals was to beef up the European economy and ensure unhindered political and social cooperation between the various European nations is made possible. This measure was taken to make sure that the impecunious economic conditions that indirectly brought Hitler, Franco and Mussolini into power could be avoided.

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On the 1st of November 1993 the 12 nations of the European community (EC) were officially inaugurated as citizens of the European Union (EU). This was the day the Maastricht treaty came into force. Although this treaty was faced with a lot of growing popular resistance to approval in several countries the proponent of the European construction felt that it would be able to put an end to the long and enervating process which had diverted west European attention from more pressing issues. The purpose of this essay is to discuss if the enforcement of this treaty has had any positive impact on the problems caused by a post cold war Europe.

What is the Maastricht treaty anyway? Although its specifics are a bit obscure, its aims are clear. The Maastricht treaty is a document which was designed to consolidate and expand upon the progress which has been made during the cold war towards the creation of a fully integrated west European economic system.

Although most people believe that the Maastricht treaty was basically a political response to the German unification and the end of the cold war, however it has roots in institutional, security and economic developments. It basically pushed forward two broad processes; the deepening of the integration and widening for the responsibilities of the European Union. It also created a community based around three pillars which covered economic relations, home affairs and foreign affairs. One of the most important provisions of the treaty was concerned with the creation of a political union. The aim was to promote a balance economic and social progress by creating an area free of international boundary. This ultimately lead to a single monetary union with a single currency for all members of the union. I will now go ahead and break down the various clauses in the treaty and discuss if it really had a positive impact on post cold-war Europe

The Maastricht treaty contained provision for the protection of the rights and interests of all citizens of the community, granting the protection of their human rights and establishing the conditions for acceptance of other countries into the union. A legal identity was created and made open to all citizens of the member countries. However it has been argued that this creation is more of a symbolic nature which reinforces the principle of free movement and non discriminations which is already in the original treaty. Under the Maastricht treaty a social policy was also established. Phrased in a text which is called the social charter, the treaty was a written assurance to an improvement in the living and working conditions of a person, suitable social protection dialogue between management and labour and combating of employment exclusion and development of human resources In addition, the charter provided for improvements in work environments for the protection of the health and safety of workers. Although this policy was very important but due to its inability to enforce administrative, legal and financial constraints on business its impact was limited

However as of present even with this rule in place approximately 18 million people are unemployed in the EU, pressure is mounting for policy reform. ( EU Homepage, World Wide Web)

The biggest disappointment under the Maastricht treaty after the cold war came with the handling of the section which deals with common foreign and security policy and defence. During the cold war the European defence was handled entirely by NATO but after the fall of the soviet in the late 1989, the question of NATO being a force in Europe became questionable and a subject of debate. NATO also felt that the EU member states should begin to take a more active role in their own defence but the European parliament was not well built enough to establish a different system. Thus in the Maastricht treaty responsibility of the defence and security issues was passed to the existing western European defence alliance called the western European Union (WEU), and it was given the job of organization and coordination of the defence policy for the EU . Although an entity separate from both NATO and Maastricht, the WEU was to coordinate a new policy while it still respected the policies already created by NATO which dealt with nuclear forces. The WEU found it extremely difficult to create a common security, defence and foreign policy because of the problem caused by unanimity. That is these policies would have to be agreed by all the member states. Security goes beyond military issues; it involves both diplomatic social and economic dimensions. To create a suitable national and international condition which is appropriate for the protection and extension of the national and regional values within the union was one of the main aims of the Maastricht treaty. By all accounts the treaty has so far failed in this mission because it was not able to establish a common foreign or defence policy nor was it able to create a common European army for all members of the EU. Majority of European are not sure of who should be in control of their defence and security. In a survey conducted in 1990 as culled from feld pp 426-30 aa‚¬A“only 47 persent of the European community felt that NATOs actions were in the best interest of Europe. However only 37 percent wanted the European community parliament to decide the security and defence policies of Europe while 31 percent wanted NATO to continue handeling the role as the protector of Europe.(Feld, pp. 426-30). We might not be seeing a common defence and security policy in the near future. This is because of the continued support given to NATO by both Germany and England and also due to the problems of unanimity. Considering the importance of America to successful European economic integration and U.S. support of NATO, the EC leaders and citizens may be satisfied to have their protection provided by a NATO with increased European influence and participation, a policy which would most likely be welcomed by NATO anyway.

The issue that received, by far, the most attention by the delegates was that of a common monetary union and the adoption of a single currency. Considered the most important achievement of the Maastricht Treaty, the deadline for a single currency was set for the year 2000. The treaty made the EMU an official goal of the EC and devised a strategy to achieve it and the institutional framework for its regulation. (Fratianni, p. 7) Also agreed upon were the requirements for joining the monetary union. To join, a country cannot have an annual inflation rate more than 1.5 percentage points above the rate of the least inflationary member states, and a budget deficit above 3 percent of GDP. (Lewis, p. 182) These were ambitious, but not impossible, numbers designed to ensure the strength and flexibility of the EMU

once implemented. The section of the treaty on economic and monetary affairs also set out the following agreements. First, the introduction of the single currency would follow an irrevocable fixing of exchange rates in order to maintain price stability. Member states would also need a sustainable balance of payments. The EC also stipulated that the policies of member states be in accordance with the principles of an open market economy with free competition. To manage this new federal economy, the treaty followed the suggestions made by the Delors Committee as well as provisions for the creation of a Central Bank. The Delors Committee had suggested the creation of a European System of Central Banks, the ESCB,

with one European Central Bank at its center. In this respect, the monetary system of the new federal economy would resemble the Federal Reserve System of the United States. The committee also accepted the principles of independence and indivisibility as the key to the success of a federal economy. Under the principle of independence, national institutions other than the Central Bank could not share in the monetary policy responsibilities. The Maastricht Treaty provided for the creation of the ESCB and one Central Bank at its center, but added to its responsibilities by giving it authority to conduct foreign exchange operations and manage foreign reserves, in addition to stabilizing prices and defining and implementing monetary policies. There have been many problems concerning the creation of a monetary union, not the least of which have dealt with the strict monetary and fiscal requirements. They have become problems even for core members such as France and Germany. Despite these economic problems, the deadline for EMU by the year 2000 remains in place; but even Germany is now admitting that this deadline may not be feasible. The reason for this is that economic growth has slowed, preventing many countries from meeting the economic criteria for joining the monetary union. Beyond these immediate threats to the monetary union, there are other issues which impact the feasibility of one currency for Europe. To begin with, by

placing control of the currency in a central bank, states lose their sovereignty with respect to fiscal and monetary planning. In addition, since the economies of several states would affect the value of the single currency, trading against the dollar or yen would be difficult.

Although the delegates at Maastricht were careful to devise an agreement that could receive complete acceptance, political, social and economic problems throughout Europe made the ratification process a problem. As a result, problems with the treaty began to surface. One of the problems was that during the signing of the accord, Europe was experiencing a mood of “Europhoria” (Goldstein, p. 54), and the twelve nation states of the EC were in a period of economic boom. This feeling was quickly replaced by confusion and fear as to the impact of Maastricht on the day-to-day lives of Europeans. The negotiations which were necessary to reach agreement at Maastricht also had the effect of making the end result “almost entirely devoid of meaning.” (Fest, p. 56) The EC was unable to keep the same cohesion which had led to Maastricht earlier because the economies of the twelve member states were entering into a period of stagnation. There were divisions between the strong and weak economies of Europe, and the trade wars between the U.S. and Japan were adding to these divisions. It was crucial to have the treaty ratified before any further progress could begin, but domestic ratification problems in France, Denmark and the UK were exposing an even greater lack of support. On April 7, 1992, four months after the signing of Maastricht, the Treaty of European Union, the new official name of the Maastricht Treaty, was ratified by the European Council. The vote was 226 votes for to 62 votes against. There were 31 abstentions. (Lewis, p. 191) Yet there were still problems with regards to certain issues. Many nations objected to the special provisions given to the UK and to the inability to agree upon a common security and defense policy. The most crucial issue was domestic ratification, and in Denmark the treaty was rejected in a national referendum on the grounds that the Danes did not like the idea of losing some of their sovereignty to the Commission, an unelected body. On June 2, 1992, the Danish rejection of the treaty was by a margin of 40,000 votes (Mazzucelli, p. 66), a narrow margin but one with a huge impact. This message was heard throughout Europe, and many people agreed with the desire of the Danes for more citizen input and less bureaucracy. Immediately, referendums were called for in France and Germany, but the European leaders did not waver in their support for the treaty. Mitterand of France, Kohl of Germany and EC President Premier Anibal Cavaco Silva of Portugal reaffirmed their commitment by jointly stating that there.would be no renegotiation of the treaty. (Lewis, p. 195) As a result of this, the treaty barely passed in the French referendum. In the UK, the House of Commons approved the treaty partly because of the strong case made for it by Prime Minister John Major. The problems did not end once the ratification process was over, however, for several issues were still unresolved. One issue was whether the Community should be widened or deepened. Widening the treaty meant the admission of new members, while deepening referred to increasing the powers of the existing EC agencies. Due to the problems of ratification, this issue was left open and is still not completely resolved. An EC summit meeting in Lisbon in June 1992 failed to make any progress on this issue, and the admission of any new members was put on hold. This summit also saw the five-year budget for the EC delayed. Heightening the urgency of these debates was the growing European recession and the fighting in the former Yugoslavia, all of which threatened the success of a federal Europe. (Goldstein, p.59) Budget problems arose when the EC announced that from 1993 to 1997 the EC budget would rise from $81 billion to $112 billion under the budget bill called the Delors Z. (Lewis, p. 188) Under the Delors Z, special attention would be paid to making sure the EC’s resources would be equitably distributed among all member countries. A solidarity fund was also established to help the poorer periphery countries of Greece, Ireland, Portugal and Spain meet their EC commitments, especially to the monetary union. This was met with some opposition by the larger countries, especially the UK and Germany, and affected the debate over widening or deepening the EC. The problems the poorer nations encountered in meeting Community economic standards demonstrated the price that might have to be paid for enlarging the EC

and delayed any attempts to resolve the issue. Due to this, any admission of new members was postponed until after agreement on the five-year budget. The EC also stopped taking requests for new admission until the year 2000, when the single currency is supposed to be in place. (Goldstein, pp. 60-61) Other related problems concerned the CAP, or Common Agricultural Policy. Projects under CAP receive half of the EC’s total budget, or 1.3 percent ($85 billion U.S.) of the total Community GNP. (Goldstein, pp. 60-61) Most of this money goes to subsidizing the French farming industry so that it can remain competitive in a European market where cheaper agricultural products will soon be available. This is seen as a necessary evil in order to keep French support for the Community. There is not enough

money available to the EC to sustain these subsidies for much longer, and the constitution prohibits the EC from running a deficit or borrowing money. Agriculture is not the only beneficiary of EC subsidies and protectionist measures. The steel and coal industries also benefit from community protection which the EC can no longer afford. The issues of subsidies and protectionism are at the core of the EC’s budgetary problems. Beyond economic issues, the EC is also having problems with the military issues handled in the Maastricht treaty. It was tentatively agreed upon in Maastricht that the EPU, the European Payments Union, would eventually assume responsibility for foreign policy and defense issues. Yet there is little evidence to show that such a cohesive policy is close to being agreed upon. This became especially apparent as early as the Gulf War, where EC members distanced themselves from NATO/American issues. The EC again showed its ineffectiveness with regards to Yugoslavia. Britain and France had very public disagreements about the size and scope of NATO and UN involvement. At the same time, moves toward creating a common defense force, which had been stimulated by a Franco-German alliance to

raise an army for the nucleus of the EC military, were stalled by a general feeling in Europe that NATO could not be replaced. Germany and Britain agreed that a continuing U.S. presence “was vital and that the NATO structure be left intact.” (Goldstein, p. 59) France opposed the move on the grounds that Europe needed to give up the dependence provided by U.S. nuclear hegemony. The issue of a common defense for a federal Europe remains unresolved, as do many others; but the key to their resolution might lie in the steps Germany will make with regards to the Maastricht Treaty.