Making the EMU: The Politics of Budgetary Surveillance and the Enforcement of Maastricht

Extract

Making the EMU: The Politics of Budgetary Surveillance and the Enforcement of Maastricht. By James D. Savage. Oxford: Oxford University Press, 2005. 239p. $85.00.

As all students of contemporary European politics know, the Maastricht Treaty of 1992 specified a series of criteria that member states of the European Union had to fulfill in order to join the single currency that would be launched in 1998–99. Most importantly, public debt had to be less than 60% of the GDP and government deficits were not to exceed 3% of GDP. When decisions on initial membership of the Eurozone were taken in 1998, the debt criterion was relaxed, but the deficit criterion was strictly enforced, and as result, Greek membership was postponed for several years. The Stability and Growth Pact adopted by the European Council in 1997, in turn, introduced a procedure whereby the European Commission would monitor the fiscal policies of Eurozone members and would be required to propose sanctions against states with persistent government deficits in excess of 3% of GDP. During 2002–4, the European Commission found Portugal, France, and Germany in violation of the Stability and Growth Pact, but the Council of Ministers declined to impose sanctions on any of these countries.