Beyond Keynes, Volume One
Edited by Shelia C. Dow and John Hillard
Chapter 11: The Maastricht Treaty: unemployment, competitiveness and distribution
Jesper Jespersen1 I INTRODUCTION This chapter challenges the argument that enhanced monetary integration in Europe will improve the economic conditions for the creation of wealth and prosperity. The impact on employment, competitiveness, distribution and the environment of the establishment of a monetary union is examined. Particular attention is devoted to the implications for the welfare state of the requirement to fulﬁl the so-called ‘convergence criteria’. According to the Maastricht Treaty, it is solely ﬁnancial conditions which have to be fulﬁlled by the participant states, notwithstanding the consequences this may have for the real economy, not to mention welfare in a broader sense. This procedure ignores important societal aspects, such as unemployment, income distribution and environmental damage. It is suggested that a European welfare index should be created to correct the analytical and empirical bias in the ‘European Monetary Debate’. II EUROPEAN INTEGRATION AND THE WELFARE STATE If one looks at the economic and political history of (Northern) European countries for the last ﬁfty years, two catch phrases characterize the period: increasing integration and an expanding ‘welfare state’. One cannot really say that one of the characteristics had precedence over the other. The experiences during the inter-war period had been so discouraging that it became an explicit demand from the democratic parties to create a new approach to economic policy after the Second World War had ﬁnished. The right-wing parties supported the market, competition and free trade whereas the left called for a welfare state. The outcome was a...
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