The European Union, Thirty Years Later
Over the course of thirty years, certain things have undergone significant changes, while others have remained consistent. On November 1, 1993, the Maastricht Treaty came into effect, introducing the European Union alongside the European Community and laying the foundations for the euro.
The United Kingdom, a nation that had been particularly committed to the Single Market, has since exited the EU. Germany, a country that had prioritized fiscal rules, continues to dominate discussions on the issue. Italy, which had played a significant role in the process leading to Maastricht with the European Council meetings of Milan in 1985 and Rome in 1990, is now less pivotal in the European integration process.
For an assessment of these thirty years and a discussion of what lies ahead, there are no better interlocutors than Sylvie Goulard and Mario Monti.
Goulard, a French national who is very active in public discourse also in Italy and Germany, has served as an advisor to President Prodi's Commission. She was also a Member of the European Parliament, and Deputy Governor of the Bank of France. During the last decades, she has always been at the center of all major debates stemming from the changes brought about by Maastricht, ranging from the EU's institutional framework to enlargement and the current challenge of pf Europe's response to the climate crisis.
Monti, formerly President of Bocconi University and Prime Minister of Italy, and currently a senator for life, during his tenure as European Commissioner (1995-2004), lent effectiveness and ambition to the Single Market envisaged by the Maastricht Treaty.
In 2012, Goulard and Monti co-authored the book Democracy in Europe: Looking Farther (Rizzoli, Flammarion).
When the Maastricht Treaty came into effect thirty years ago, what was the prevailing conception of the European project and what were your expectations?
Sylvie Goulard: It was a period characterized by great optimism about the future of the European Union, following the reunification of Germany and the return of Eastern Europe to democracy. The Maastricht Treaty also laid the foundation for the common currency, but its ratification marked the first instance of tensions in public discourse and highlighted a certain complexity of the process. Subsequently, every step taken in European integration has been contingent upon sub-optimal agreements, thereby hindering the creation of the necessary conditions for these innovations to truly be effective.
Mario Monti: At the time, I saw in the Maastricht Treaty Europe's attempt to adapt to the major geopolitical change of the time, the fall of the Berlin Wall. It was a significant milestone in the journey that led Germany to give up its currency, historically a source of pride and strength, in exchange for the effort of the rest of Europe to become somewhat more like Germany.
I have always believed that member countries benefit from the European project not only because they integrate into it but because they are transformed by it.
Therefore, as an Italian, I saw the Maastricht Treaty as a push towards the transformation of our economic and institutional structures in the direction of the "social market economy", which I have always advocated for but was scarce or non-existent in Italy.
The Maastricht treaty famously introduced more binding limits to member states' deficits and debt. What have we learned over the past three decades about the coordination of national public finances at the EU level?
Sylvie Goulard: Before the process initiated in Maastricht, a single central bank, namely the German Bundesbank, had such a disproportionate influence that its monetary policy decisions shaped all other European economies. All of us, particularly France and Italy, willingly agreed to transfer a degree of sovereignty to the European Central Bank in order to collectively decide on monetary policy. It is within this context that we freely accepted the debt and deficit thresholds outlined in the Maastricht Treaty.
Mario Monti: Today, the kind of constraints introduced by the Maastricht Treaty and later by the Stability Pact may seem rudimentary. However, at the time, the purpose of these constraints was not to persuade economists that these parameters would determine optimal policies, but rather to persuade public opinion in the countries with strong currencies - Germany and the Netherlands - that they should not worry about the value of their savings and pensions after the introduction of a single European currency.
Has the Single Market, the notable success of the Maastricht Treaty, and the culmination of the initial phase of European integration, become vulnerable today?
Sylvie Goulard: When assessing the health of the European single market, we must always consider what Germans refer to as Standort, which encompasses the conditions for business development and competitiveness. Safeguarding the single market as we have known it in recent decades is insufficient, as the reference context is evolving amidst crises in multilateral trade governance and new vulnerabilities in global value chains. Furthermore, in the face of the urgent need to address the climate crisis, we can no longer confine ourselves to promoting trade; rather, we must promote fair and sustainable trade.
Mario Monti: The single market is one of those things whose importance is truly appreciated only when it begins to weaken. When Norway voted against joining the EU in 1994, it desperately sought, and succeeded in, remaining within the single market.
Today, Britain would go to great lengths to have access to the single market without being a part of the EU. However, the insistence on not subjecting itself to the judgments of the European Court of Justice is unacceptable because a functioning market relies on rules and institutions (such as the European Commission and the European Court of Justice) that are tasked with enforcing them.
Today, in major countries like France and Germany, too many people argue that a functioning single market can be an obstacle to full European sovereignty because it limits the room for maneuver, for example, in response to subsidies offered by the United States in the Inflation Reduction Act.
However, if the current expansion of the role of the state in the economy occurs at the national rather than the European level, it will lead to a distortion of the single market - which is the primary driver of competitiveness for the EU - and it will hinder the development of European sovereignty.
Already a decade ago, in the book you co-authored, you were pointing out that the European Council of Heads of State and Government was becoming a concern for the Union, with its unappealable decisions made behind closed doors. How has the European Council evolved since Maastricht?
Sylvie Goulard: The European Council has considerably exceeded its original mandate. The concept of the European Council can be attributed to French President Valéry Giscard d'Estaing. Jean Monnet accepted it in conjunction with the direct election of the European Parliament, with the ambition of creating a union not only of governments but, above all, of citizens.
For many years, the European Council was not even regulated by treaties; it functioned as an informal assembly of national leaders. It was only with the 2007 Lisbon Treaty that the European Council was officially recognized as having a role in providing stimulus to the decision-making process, albeit without legislative powers. While all members of the European Council are accountable for their decisions at the national level, as a European body, they are not subject to any form of oversight. Their decision-making lacks transparency, to the extent that they even hold 27 separate press conferences. In 2004, the European Council initiated negotiations with Turkey without any public debate, and we have observed the subsequent disappointing outcome of that approach.
Mario Monti: The role of the European Council can be significant, but after the Great Financial Crisis of 2009, given the almost absence of a substantial community budget, the main tool for resolving crises proved to be money, primarily supplied by national governments, and with money came power. Even when the European Council has subsequently addressed not strictly economic issues, it has retained a certain presumption of supremacy.
There is, therefore, a distortion in the Union's decision mechanism, especially now that the concept of national interest has taken precedence, and members of the European Council in Brussels negotiate in the interest of their own country rather than that of the Union.
The dominant intergovernmental dimension within the European Council then extends to the Commission and other bodies. The entire system becomes infused – I would dare say "infected2 – with the tangled web of national interests.
At the time of the Maastricht Treaty's entry into force, environmental concerns held a rather marginal position. Has the EU now made climate a top priority?
Sylvie Goulard: The pivotal UN summit that brought the climate issue to the fore was the one held in Rio de Janeiro back in 1992. While there are some references to the environment in the Maastricht Treaty, there is no consistent commitment commensurate with the knowledge available on the problem as early as three decades ago. A resolute commitment to addressing the climate crisis at that time would have been significantly more effective and less costly than the efforts we are currently compelled to make, given that we are approaching the limits of the planet's resources.
Mario Monti: Indeed, the EU did not do enough in 1992-1993, but after the Rio and Kyoto summits, the flag of environmental protection was waved primarily by Europe. And it's the European Union that has gradually persuaded the United States, particularly under the Biden administration, to become a key player in the response to the climate crisis.
However, I must point out that, as Commissioner for the Single Market in 1997, I attempted to propose a directive on a carbon tax that did not even find consensus within the Commission and never made it to Parliament. Certainly, I was a novice commissioner, not as influential as that issue would have required. Or perhaps the timing was not right.
The EU has started to discuss the entry of another eight members by 2030, including Ukraine, which is still embroiled in conflict. Would a larger EU also be a stronger one?
Sylvie Goulard: Extending aid and hope to those facing bombings or existential threats is both noble and necessary, whether in the case of Ukraine or Moldova. However, if we intend for the EU to be a community of citizens rather than just of governments, then this process should be shared with the population and accompanied by substantial reforms. Regrettably, this is not happening.
The European Council has set a geopolitical imperative, and all must conform to it. Nevertheless, the EU is not an informal club; it has policies, some of which require funding and a framework of rights overseen by a common court.
I find it quite perplexing that we contemplate further enlargement of the EU – including Turkey? - without a clear strategy for establishing a common foreign and defence policy.
Mario Monti: I believe it is important to keep countries like Ukraine, which are not currently EU members, close to the EU. That's why I didn't dislike the idea of a European Political Community proposed by French President Emmanuel Macron. It would allow us to provide support without taking commitments that could distort our current EU.
Unfortunately, the only enlargements that seem to have a geopolitical imperative are those towards the East. Certainly, what happens in Georgia is of great importance, but closer to the EU border, in places like Libya, we have Turkish and Russian presence that poses no fewer challenges to the European project than what is happening on the eastern front.
In the decades to come, immigration issues will be decided more in the South than in the East. Therefore, like many others, I have significant reservations about possible new enlargements, if they were to be full-fledged.