The Maastricht Treaty (formally, the Treaty on European Union or TEU) was signed on 7 February 1992 by the members of the European Community in Maastricht, Netherlands. It created the European Union and led to the creation of the single European currency, the euro.


One of the obligations of the treaty for the members was to keep “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP.”

Over 20 years have passed. Let’s see how those “obligations” panned out.

Via translation from Les Echos, please consider Severe Crisis of Adolescence to the Maastricht Treaty and the Euro.

Once in the monetary area, governments shall, subject to penalties, limit their deficit to 3% of GDP and debt to 60% of GDP. The treaty, however, is violated even before the euro was born because of the 11 states that agreed to adopt the treaty in 1999, six were above the required level of debt, including Germany, Austria, the Netherlands Netherlands and Italy.

Pursuing the logic of “every man for himself”, a “no bail-out” clause prohibits the central bank and the U.S. to rescue a partner if it has no access to financial markets.

Original Sin

Titles on the following chart from Les Echos are in French, but with the above translation should be easy enough to understand.

Maastricht Disillusionment

Eurointelligence reports on Maastricht Disillusionment.

The world has changed since the Maastricht treaty ten years ago. Les Echos shows public debt then in 1992 and now, showing how drastic public debt has risen in all member countries. Today, only four member states have debt to GDP levels below the 60% limit. Looking back the three original fault lines of the Maastricht treaty have been revealed with the eurocrisis: the lack of solidarity, insufficient mutual surveillance and lack of economic convergence. These fault lines put into question the project as such.

A recent poll showed that today only 36% would still vote for the Maastricht treaty (compared to 51% in 1992) in a referendum, the anti-euro rhetoric has become acceptable in the establishment.

The bureaucrats are holding this mess together, by force. A vote now would not even pass.

Mike “Mish” Shedlock