EU twenty years later: we need Maastricht 2

Twenty Years Later, written by Alexandre Dumas, is the central novel of the Cycle of the Musketeers. And exactly twenty years have passed since the Maastricht Treaty, the “central” treaty which introduced the euro but without providing for safety nets. 

Today, twenty years later, the goal of an ever closer European Union, the third step after the single market and the common currency, seems to leave the majority of European citizens indifferent, if not clearly hostile, tired of the debt crisis and of the heavy following of austerity policies and attracted by populist sirens.

Maastricht entered into force on 1 November 1993, committing member states to an ambitious program of political and economic cooperation, all coordinated in Brussels, a decision which ultimately led to the single currency, launched in 1999.

This "great leap forward" - to quote Mao - for the monetary union was a step of a completely different scope from any other plan previously decided, but analysts recall that it was incomplete, without those elements necessary to ensure that the rules were really followed by everyone. 

Maastricht in particular set limits for the budget deficit - the deficit between government spending and revenue - at three percent of gross domestic product, and at 60 percent for total debt.

But unfortunately, the rules on the Stability Pact were forced precisely by Jacques Chirac's France (centre-right) and Gerhard Schroeder's Germany (centre-left) when both countries needed to break them. A bad signal that gave courage to do the same, among other things, also to Greece, with the consequences that we have seen up to the possible disempowerment of the euro. 

Thus, since the (already insufficient) safety net had been breached without consequences of suffering sanctions from the major countries, when the global financial crisis erupted at the end of 2007, many Member States had written up huge debts, such as Italy which it was traveling at 120% of GDP, and a few years later, with a debt that had risen due to bailout costs, no less than 25 of the 27 members of the European Union had flouted the Maastricht rules. In short, a failure.

European leaders are now trying to undo the damage, with the 17 – soon to be 18 – eurozone countries aiming to put in place a framework of sanctions and rewards with the Fiscal Pact wanted by Chancellor Angela Merkel to ensure that the rules this time they are truly respected.

Looking back on the Maastricht negotiations, it must be remembered that there was not enough willingness from governments to make the tough choices that were necessary.

THE FIGHT AGAINST INFLATION – In Maastricht they were more interested in fighting inflation (and no one was thinking of deflation which is now entering the field) than in anticipating the systemic problems with banks and deregulated finance which would later be the fuse of the crisis.

The Maastricht Treaty did not prepare Europe for the major financial stability challenges at the heart of the crisis today. 

THE COSTS OF GERMANY'S BANK RESCUE- For example, according to the IMF report in August, Germany spent 203 billion euros on the country to save its banks, 29 of which in capital and 174 in guarantees, about 12 billion of capital was returned. But in 2012 there was "a new additional transfer of 100 billion euros to the Landesbanken (the regional public banks) for their restructuring". Germany was able to bear the brunt of the restructuring on its own but other smaller countries collapsed and had to ask for help.

THE AMERICAN CRITICISM – Many observers, especially Americans, immediately warned that it was folly to plan a single currency without a complete economic, political and banking union. It would have been 
The absence of this support, which is essential for any currency, led to the fact that when banks in some eurozone countries collapsed, they threatened to collapse first the sovereign debts of related countries and then the entire system, driving the zone euro into a deep recession and forcing the governments of the targeted countries to adopt programs of harsh austerity.

In response, European leaders tried to fight the crisis by improvising ongoing reforms (ESM, ESFS) together with the IMF (now increasingly tired of this European partnership) to get Europe back on its feet.
In short, a treatise halved, to put it like Calvino. Despite the shortcomings, however, Maastricht was still the last time the EU set itself a major, high-level goal. Since then, there has been nothing quite as structured and ambitious. Maybe it's time to go back to a Maastricht 2 to complete the work of banking, fiscal (Eurobond) and political union.