The Maastricht Treaty entered into force 30 years ago, on November 1, 1993. It notably enabled the creation of the euro, but what remains of it today? Jézabel Couppey-Soubeyran, economist, scientific advisor at the Veblen Institute, is franceinfo’s eco guest.
It has been 30 years since the Maastricht Treaty entered into force on November 1, 1993. It is the founding text of the European Union since it notably advanced European integration and monetary integration, by initiating the creation of the euro. Jézabel Couppey-Soubeyran, economist and scientific advisor at the Veblen Institute and lecturer at Paris-I Panthéon-Sorbonne University, looks back on the changes he caused at franceinfo.
franceinfo: Looking back, did the Maastricht Treaty bring the European Union into a new era?
Jezabel Couppey-Soubeyran : Of course, this is a major step. The Maastricht Treaty laid the foundations for the Economic and Monetary Union which established the euro, which established the European Central Bank and which established the European central banking system. So it’s an important step, but ultimately still has quite a few holes in the racket. It was a treaty which focused a lot on the conditions of accession to the single currency by setting the famous convergence criteria and the budgetary criteria, which remained what they were in the Treaty of Maastricht even today . There is in particular the public deficit criterion which must not exceed 3% of gross domestic product.
Knowing that for France, it will be 4.9%.
Yes because there has been crisis management in the meantime. There is also this famous criterion of public debt not exceeding 60% of gross domestic product and this too has been considerably exceeded. So there were these convergence criteria that the candidate countries for the euro had to respect in order to be able to adopt the euro. The problem is that in the treaty, nothing has been provided for cases of divergence after the adoption of the single currency. However, there were discrepancies.
How is the Union doing today? The euro has nevertheless gone through some areas of turbulence. Would you say it is completed, under construction or would you say it depends?
I would say that it is a very incomplete union, precisely because it was not provided in the treaty how to continue the Union. There was ultimately a sort of bet, in this Treaty of Maastricht, of a spontaneous union which would take place by itself once the single currency was adopted. So we did not see fit to accompany this monetary union first with a banking union, that is to say by monitoring on a European scale the banks in the euro zone which put the euro into circulation. It took the sovereign debt crisis, which almost exploded the euro zone, for us to put in place this banking union from the end of 2012. But this banking union is also incomplete. So we monitor the banks at the euro zone level and we have planned a system to resolve their difficulties in the event of a crisis. But there is still incompleteness in terms of deposit guarantees and above all what is missing is budgetary union and fiscal union. Nothing is planned to really pursue a budgetary policy worthy of the name on a European scale.
Is fiscal union wishful thinking?
Unfortunately, yes, it seems to be so until now since the European Union has allowed tax havens to flourish within it and has also allowed a race to the lowest tax bidder to continue. So it’s quite dramatic.
“There is no fiscal union, no fiscal union and no political union, so it still makes for a very incomplete and fairly shaky union.”
Jezabel Couppey-Soubeyran
It does not really have the means to carry out the major transformations that we need to carry out at least on a European scale, particularly in the face of the ecological crisis.
Yet there is a Green Deal from the Union?
It’s true, there is a green deal and it was still a very important initiative. But it is a green pact which is struggling at the moment, which is experiencing difficulties and to which we are in the process of coming back a little. There was, of course, a financing initiative as part of the European recovery plan, at the time of the management of the health crisis, in terms of pooling financing since the European Commission launched a joint loan in the name of the European Union. On the other hand, this was only accepted on the condition of not repeating the operation. So there are no common resources and no common taxes to carry out a major investment policy, making it possible to carry out this famous green pact which is nevertheless essential.
A reform of European budgetary rules is in the pipeline. Do you see them evolving? Do they need to evolve?
They should evolve. These rules would undoubtedly have to be much less quantitative and more qualitative, and they would undoubtedly adopt a somewhat privileged regime, particularly for investments in the ecological transition. But I really fear that these rules will only be amended marginally and remain as they are. So we will remain in a sort of infernal triangle of European public finances, with very limited resources and very limited financing capacity. We also still have this race to the lowest tax bidder which, despite everything, continues. So if we really want a European Union, we need more Europe, we need to truly unite. Otherwise, unfortunately, the foundations are not solid enough and there is a strong risk that one day it will all fall apart.