The Evolution of the EU Economic Governance since the Treaty of Maastricht: An Unfinished Task
| DOI | 10.1177/1023263X1302000302 |
| Published date | 01 September 2013 |
| Date | 01 September 2013 |
| Author | Alexandre de Streel |
| Subject Matter | Article |
336 20 MJ 3 (2013)
THE EVOLUTION OF THE EU ECONOMIC
GOVERNANCE SINCE THE TREATY OF
MAASTRICHT: AN UNFINISHED TASK
A S*
ABSTRACT
is paper reviews the evolution of the Economic and Monetary Union from its
inception in 1992 with the Treaty of Maastricht to the most recent reforms adopted in
2013 to respond to the eurocrisis. e pape r describes the evolution of the four pillars of
economic governance: the surveillance and the correction of scal imbalances between
the Member States which are mainly based on the revised Stability and Growth Pact,
the surveillance and the cor rection of macroeconomic imbalances between the Membe r
States, the coordination of national economic and social policies which are now based
on the Europe 2020 Strategy for Growth and Jobs, and the nancial solidarity between
Member States which is currently mainly ba sed on the European Stability Mechanism.
e paper also deals with the institutional implications of EMU evolution with the
emergence of an institutional l andscape for the euro area. Finally, the paper analyses
the implications for the transformation of EU law in terms of sources of law with
extensive use of international treaties, recommendation s and sui generis contracts
between the EU and its Member States, in terms of enforcement mechanisms relying
on self-enforcement and peer pressure, and in terms of a regulator y model. e paper
concludes with grim pe rspectives that the recent reforms may not be sucient to make
the euro sustainable.
Keywords: E conomic and Monetary Union; economic governance; eurocrisis; Europe an
Stability Mechan ism; Fiscal Compact; Stability and Grow th Pact
* Professor of law, University of Na mur.
e Evolution of the EU Economi c Governance since the Treat y of Maastricht
20 MJ 3 (2013) 337
§1. INTRODUCTION
When the Economic and Monetar y Union (EMU) was established in Maastricht, the
authors of the Treaty made two fundamental choices. First, they decided t hat the euro
would be the currency of the Union and all EU Member States should adopt it when
their macroeconomic conditions enable them to do so. Se cond, they decided to centralize
the monetary polic y but to leave the economic policy decentrali zed.1 is fundamenta l
imbalance, which w as criticized by some, was the only fea sible political option at the time,
as most Member States were not willi ng to transfer their economic policies to the EU.
However, due to the cross-countries external ities caused by a common currency, this
imbalance entai led the risk of unsus tainable sca l and economic policies in some Member
States, and in the long ru n, the installation of a tra nsfer Union. To prevent such risk and
guarantee a Union of stabil ity and responsibility, the authors of the Treaty established a
governance model based on three ma in characteristics:2 (i) rst, the coordi nation of the
economic policy, to be regarded as a matter of common concern bet ween Member States,
with so law instr uments in order to achieve economic convergence (Article121 TFEU);
(ii) second, the prohibition of nancial solidarity among Member States (Article 125
TFEU, the no-bailout clause) except in very exceptional circumstances beyond the
control of the States (Article 122 TFEU) and the prohibition of monetary nancing
by the ECB and national centra l banks (Article 123 TFEU) in order to give sucient
incentives to Member States to maintai n sustainable sca l policies, and to markets to
discriminate between countries according to t heir nancial risks; (iii) third, limits to
government decit and debt with sanct ions decided by the Council in order to force
sustainable sca l policies (Article126 TFEU). In practice, the coordi nation of economic
policy was based on t he Lisbon Strategy and the Open Method of Coord ination and the
surveilla nce of scal policies was based on the Stability and Growth Pact. In brief, the
governance model chosen for economic policy was base d on rules and markets , not on
discretion and solidarity.
e evolution in the EU over the last decade quest ions those two main choices made
20 years ago. e eurocrisis , which started in 2010 with the vir tual bankruptc y of Greece,
was a consequence of the systemic fa ilure of the governance model chosen to deal wit h the
1 e Maastricht ne gotiations were based on t he Report on economic a nd monetary union i n the
European Com munity, prepared by the Commit tee chaired by J. Delors and presente d in April 1989.
On the backgrou nd to the negotiations, see K. Dy son and K. Featherstone, e Road to Maa stricht:
Negotiating economic and monetary union (Oxford University Press , Oxford 1999).
2 On the economic govern ance decided in Maas tricht and complemented wit h the Stability and G rowth
Pact, see J. Pipkörn , ‘Legal arra ngements in the Treaty of Ma astricht for the eec tiveness of the
economic and moneta ry union’, 31 CMLR ev. (1994), p.263, as well as M.J. Herdegen, ‘P rice stabilit y and
budgetary re straints in th e Economic and Monetar y Union: e law as guardia n of economic wisdom’,
35 CM LRev. (1998), p.9–32; J.V. Louis, ‘A Legal and Ins titutional Approach for build ing a Monetary
Union’, 35 CMLRe v. (1998), p.33–76; H.J. Hahn , ‘e stability p act for European Monet ary Union:
Compliance wi th decit limit as a cons tant legal duty’, 35 CM LRev. (1998), p.77–100.
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