Question

Explain EU Monetary Integration before Maastricht

Answer 1

The Maastricht Treaty was signed on February 7, 1992, by the leaders of 12 member nations with the serious intention to create a common economic and monetary union.

Indeed, not only did it reform the structure of the European Community (EC) through the establishment of a political union, and strengthen economic integration with the creation of the Economic and Monetary Union (EMU), but it also enabled the stabilisation of political tensions within Europe at the end of the Cold War, and integrated a unified Germany into the EU. As a result of this treaty the EC could not be called as such anymore, and from that point on it had to be referred to as the European Union. With the Maastricht Treaty, the EC took a step forward in European integration and in uniting its member states.

This treaty led to the creation of Euro and 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.