European Monetary Union and Freedom for Capital

Abstract

The Maastricht Treaty (January 1992) highlighted a turning point in the development of the EU and can be considered as the root of the present EU crisis. In Maastricht (the Netherlands) the monetary union was agreed. The negotiations for the Maastricht Treaty took place during upheaval in Central and Eastern Europe when the divide between Eastern and Western Europe was suddenly lifted, and the EU was faced with the historic challenge of uniting Europe. Nevertheless, the public discussions about the Maastricht Treaty were mainly about the question of whether Europe should move towards a federation. The decision was to abandon the federal option and to opt for an ever-closer union of sovereign states. The European Communities transformed into the European Union. With respect to the challenge of offering post-socialist Central and Eastern Europe the perspective of EU membership, there was the choice for expanding the EU instead of first deepening cooperation before expanding, so creating an institutional trap. All these discussions were taking place in the context of a mood of victory — that is the victory of ‘markets’ over the ‘state’. Market fundamentalism spread quickly after the demise of communism in Eastern Europe. Increasingly, EU member states began to share the vision of a Europe of free markets. Market integration proceeded much faster than did integration in other spheres. The dominant view became that with a free market at the EU level, and by removing regulations at the national level, enormous productive forces could be released.