Introduction to the fiscal framework of the EU: The Maastricht Treaty, the Treaty on Stability, Coordination and Governance, and the Stability and Growth Pact

Abstract:

Almost 30 years ago, the Maastricht Treaty laid the basis for economic and monetary union (EMU). Its fiscal provisions have been further developed by subsequent primary and secondary legislation – in particular, the Stability and Growth Pact with its preventive and corrective arms, and the Treaty on Stability, Coordination and Governance in EMU. These instruments together constitute the fiscal framework of the European Union. In early 2020, the European Commission launched a review of the EU's economic governance, seeking in particular to establish how effective the surveillance provisions have been in achieving their objectives.

This paper aims to provide an introduction to the Union's economic governance, starting from a brief overview of the economic literature, and concluding with a look at possible developments that might follow from the review, not least examining the various calls for its amendment that have been put on the table. While the Commission's review has been put to one side while the immediate issues of the coronavirus pandemic are addressed, the economic consequences of the pandemic are themselves changing the context for the review.

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