Despite recent turmoil in European currency markets and the near-defeat in France of the Maastricht treaty, momentum toward full economic and political integration of the European Community will continue. Community leaders must now put the overambitious Maastricht pact on a more realistic track - one that accommodates widespread public concerns about loss of sovereignty to an ascendant Germany and a powerful Brussels-based bureaucracy.
Walter Goldstein is a professor of international relations at Rockefeller College, State University of New York at Albany. He writes regularly for Le Figaro of Paris.
A Premature Treaty
IT WAS INEVITABLE that the Maastricht treaty on European union would run into difficulty. The pact was premature in conception and too ambitious to survive intact. It had been signed in December 1991 when a mood of "Europhoria" held sway. With spirits boosted by a surge of economic growth the 12-nation European Community (EC) pledged to build a lasting union. It was to be the successor to both the Common Market launched in 1958 and the integrated customs union created by the Single European Act of 1987. The historic Maastricht treaty was to take the next step: to create a far-reaching economic and political union that might one day become the United States of Europe.
European leaders realized nine months later that their conception was ill-timed. The EC-12 proved too divided to commit to a revolutionary compact on monetary integration by decade’s end or to surrender a major portion of power to federal authorities in Brussels. A failed referendum in Denmark, and later a marginally successful plebiscite in France, revealed unexpectedly low support across Europe for unification.
Europe’s financial markets cracked as uncertainty about Maastricht’s chances for ratification increased. Speculators drove the markets into a two-day panic in September, selling short on sterling and the lira until Britain and Italy were forced to drop out of the Community’s fixed exchange-rate mechanism (ERM). The attempt by the EC to impose a common financial discipline was undermined. The markets had gained power at the expense of the EC governments, and the Maastricht treaty was cast into peril.
Resistance on the Road to Union
WHY DID THE TREATY meet such stiff resistance? Three explanations have been offered. First, the EC lost its balance in the temporary breakdown of the ERM; it could not restore cohesion among the 12 stalled economies. Second, the ratification debates in Denmark and France exposed a lack of popular understanding and sympathy. Third, the union treaty fell victim to the financial and trade wars waged between the strong and weak currencies of Europe, Japan and the United States.
This is a premium article
You must be a logged in Foreign Affairs subscriber to continue reading. If you wish to continue reading this article please subscribe , or activate your online account to get full online access.
Log In
Buy PDF
Buy a premium PDF reprint of this article.Related
Markets are reeling because Europe's leaders have only offered up half-measures to resolve the crisis. Not until Brussels, Paris, and Berlin realize the fundamental flaw in their current approach -- a lack of real political and economic integration across the eurozone -- will there be an end in sight.
Most pundits argue the eurozone has only two options: break up or create a fiscal union to match its monetary one. In fact, there's a third, and better, path: adopt tighter market discipline, bailing out illiquid countries while letting truly insolvent ones go bust. The result would be a collection of fitter economies and a Europe strong enough to play a big role on the world stage.
The euro crisis is not a simple story of Greek sinners and German saints. In fact, imposing austerity on the eurozone's periphery alone will accomplish little. To save the continent, its richer countries and private investors must share in the sacrifice.

Sign-up for free weekly updates from ForeignAffairs.com.