Maastricht Treaty

Maastricht Treaty
Treaty on European Union
Type	Amending treaty
Signed	7 February 1992
Location	Maastricht, Netherlands
Effective	1 November 1993
Signatories	1992 EC members
Languages	10 Danish; Dutch; English; French; German; Greek; Irish; Italian; Portuguese; Spanish;
	Treaty on European Union at Wikisource

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This article is about the European Union treaty of 1992. For the 1843 treaty between Belgium and the Netherlands, see Treaty of Maastricht (1843).

For the content of the treaty as of 2009, see Treaties of the European Union#Treaty on European Union

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Consolidated version of the Treaty on European Union

The Maastricht Treaty (formally, the Treaty on European Union, (TEU)) was signed on 7 February 1992 by the members of the European Community in Maastricht, Netherlands.^[1] On 9–10 December 1991, the same city hosted the European Council which drafted the treaty.^[2] Upon its entry into force on 1 November 1993 during the Delors Commission,^[3] it created the European Union and led to the creation of the single European currency, the euro. 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 article.

[edit] Content

The treaty led to the creation of the euro, and created what was commonly referred to as the pillar structure of the European Union. This conception of the Union divided it into the European Community (EC) pillar, the Common Foreign and Security Policy (CFSP) pillar, and the Justice and Home Affairs (JHA) pillar. The first pillar was where the EU's supra-national institutions — the Commission, the European Parliament and the European Court of Justice — 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 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 (EPC), which had been first written into the treaties by the Single European Act 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).

[edit] The Maastricht criteria

Main article: convergence criteria

The Maastricht Treaty established the Maastricht criteria and the EU single market which ensures the free movement of goods, capital, people and services. (2003 German stamp commemorating the tenth anniversary of the enforcement of the Maastricht Treaty in 1993)

The Maastricht criteria (also known as the convergence criteria) are the criteria for European Union member states to enter the third stage of European Economic and Monetary Union (EMU) and adopt the euro as their currency. The 4 main criteria are based on Article 121(1) of the European Community Treaty.

1. Inflation rates: 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 (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 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 and the Czech Republic, still meet this target.^{[citation needed]}

3. Exchange rate: Applicant countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for two consecutive years and should not have devalued its currency during the period.

4. Long-term interest rates: 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.

[edit] Signing

The signing of the Treaty of Maastricht took place in Maastricht, Netherlands on 7 February 1992. The Dutch government, by virtue of holding Presidency of the Council of the European Union during the negotiations in the second half of 1991, arranged a ceremony inside the government buildings of the Limburg province on the river of Meuse. Representatives from the twelve member states of the European Communities were present, and signed Treaty as plenipotentiaries, marking the conclusion of the period of negotiations.

[edit] Ratification

The process of ratifying the treaty was fraught with difficulties in three states. Denmark first rejected the treaty on 2 June 1992 by fewer than 50,000 votes in a referendum. In September 1992, a referendum in France 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 by Denmark on 18 May 1993 with the addition of the Edinburgh Agreement which lists four Danish exceptions.

In the United Kingdom, an opt-out from the treaty's social provisions was opposed in Parliament by the opposition Labour and Liberal Democrat MPs and the treaty itself by the Maastricht Rebels within the governing Conservative Party. The number of rebels exceeded the Conservative majority in the House of Commons, and thus the government of John Major came close to losing the confidence of the House.^[4]