Maastricht’s Fiscal Rules at Ten: An Assessment

The Maastricht Treaty is ten years old. Its fiscal rules played a key role in kickstarting and sustaining the budgetary retrenchment efforts in European Union countries in the run–up to economic and monetary union (EMU). The experience of the Maastricht–induced fiscal consolidation shows that the political economy dimension of the rules is key to their success. It remains to be seen whether the stability and growth pact — which aims to lock EMU members into a permanent fiscal discipline commitment while allowing for flexibility to cushion cyclical fluctuations — will work. In order to succeed in this undertaking, EU governments and institutions have to tackle a number of open issues in the implementation of the pact while recreating the political drive which made Maastricht a success.