Why We Need To Rewrite The Maastricht Rules

by John Weeks

The 1992 Treaty of Maastricht that lay the basis for the euro committed signing governments to several economic targets. Subsequent treaties and protocols made these targets stricter. The targets suffer from serious technical mis-specification. The problems of the criteria have their basis in a fundamental flaw that must be recognized and corrected to prevent further economic degeneration of the euro zone and the wider EU.

While allegedly having universal application across countries and over time, the targets refer to the special case of a growing economy at full employment (full capacity). The treatment of this special case as the general case comes from ideology, the narrow neoliberal version of neoclassical economics.

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