Maastricht on the ropes after victory

September 30, 1992
Issue 

By Catherine Brown

With almost one out of two voters rejecting the Maastricht Treaty, the "yes" vote in the September 20 French referendum poses more questions than answers for a future united Europe.

When Denmark said "no" to the treaty on June 2, it was totally unexpected. The Danish parliament had already ratified the treaty by 130 votes to 25.

Denmark was one of the few countries already complying with the "convergence" criteria for joining the planned economic and monetary union (EMU) — rates of inflation, budget deficit, public debt and long-term interest rate. In Greece and Italy, the governments have sparked strike waves with austerity budgets designed to enable them to comply with the criteria.

The three major French political leaders came out for a "yes" — President Francois Mitterrand, the Gaullist Jacques Chirac and Giscard d'Estaing. The more publicised "no" opposition campaign came from the National Front and rebel Gaullists. Yet a range of left parties, including the Communist Party, campaigned against Maastricht.

A backdrop to the referendum was growing dissatisfaction with the Mitterrand government. In its 10 years in office, unemployment has doubled. A senior French civil servant joked in the Guardian that perhaps Mitterrand should promise to stay in office if the vote was "no" and resign if it was "yes".

As the polls indicated a growing possibility of a "no" vote, the voters themselves came under attack. Were they going to succumb to selfish national considerations (i.e. reject Maastricht to reject Mitterrand)?

The large "no" vote represented more than just a rejection of the Mitterrand government, though that was an important factor. It expressed real fears of the three Bs — Brussels, the Bundesbank (Germany's central bank) and bureaucracy.

Maastricht has been described as "a bankers' charter" because it gives a range of economic policy decisions to a proposed European Central Bank's governing council. This would consist of governors of national central banks and only six other executive members. Thus all key economic powers will be in the hands of unaccountable commissioners and bankers.

The proposed final stage of EMU, to be reached between 1997 and 1999, envisages a single European market and single currency. Recent pressures on the Exchange Rate Mechanism, a step prior to union that is meant to establish parity and stability between the European currencies, have been described as a clash between the central banks and the markets.

Italy and Britain have already dipped out of the ERM, and the currencies of Spain, Ireland and now France are in the speculators' sights.

It's estimated that European central banks have spent at least Dm85 billion since early September bailing out the weaker currencies. Michel Sapin, the French finance minister, says of the speculators, "During the revolution, such people were known as agioteurs and they were guillotined". A London banker laments " the markets have lost their fear of the central banks."

The question being asked is whether Maastricht can survive the currency crisis and the French referendum. Some are predicting that a core group of France, Germany and the Benelux countries might go it alone on a partial EMU in 1994. A two-speed union is still not the preferred option for European big business.

There is growing popular pressure in Britain and Germany for a referendum on Maastricht. The Major government has said no, supported by the Labour Party. Their argument is that in a parliamentary democracy, a referendum is not necessary! Polls in Germany indicate that 80% want a referendum and that a majority would then say "no".

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