Maastricht Treaty 1991

Maastricht Treaty 1991

an agreement between member countries of the European Community (EC) which renamed the EC as the EUROPEAN UNION to reflect the move towards a deeper integration of the economies of member countries and the acceptance of broader political and social responsibilities.

The Treaty endorsed a formal commitment to the establishment of ECONOMIC AND MONETARY UNION (EMU) and the introduction of the EURO by 1999, inter-governmental cooperation covering justice and home affairs including policing, criminal actions, extradition and illegal immigration, and intergovernmental cooperation in external affairs, including the introduction of a Common Foreign and Security Policy (CFSP) covering defence, relationships with NATO etc. The Treaty also introduced the concept of EU citizenship as a supplement to national citizenship. See SUBSIDIARITY, SOCIAL CHAPTER, AMSTERDAM TREATY. See also BUDGET (GOVERNMENT), FISCAL POLICY.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

Maastricht Treaty 1991

an agreement between member countries of the then European Community (EC) that renamed the EC as the EUROPEAN UNION to reflect the move towards a deeper integration of the economies of member countries and the acceptance of broader political and social responsibilities.

The Treaty endorsed a formal commitment to the establishment of ECONOMIC AND MONETARY (EMU) by 1999, intergovernmental cooperation covering justice and home affairs including policing, criminal actions, extradition and illegal immigration, and intergovernmental cooperation in external affairs, including the introduction of a Common Foreign and Security Policy (CFSP) covering defence, relationships with NATO, etc. The Treaty also introduced the concept of EU citizenship as a supplement to national citizenship. As regards Economic and Monetary Union (EMU), the Treaty proposed a three-stage plan for the introduction of a ‘single/common’ currency for the EU. The plan (arising from the earlier ‘Delors proposals’) involved: Stage 1 (1991–94) - all EMU members to participate in the exchange rate mechanism (ERM) of the EUROPEAN MONETARY SYSTEM; Stage 2 (1994–98) - members to make every effort to meet various ‘economic convergence’ criteria agreed at Maastricht, including low inflation rates (under 3%) and small budget deficits (under 3% of GDP). In 1994 a European Monetary Institute was set up to oversee this process. In 1998 it was replaced by the EUROPEAN CENTRAL BANK in the build-up to Stage 3 (1999). On 1 January 1999, a new ‘single currency’ was introduced that, after a brief transitional phase, replaced the individual domestic currencies of EMU members. See ECONOMIC AND MONETARY UNION and EURO for further details. See also SOCIAL CHAPTER, AMSTERDAM TREATY.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005