Economic and fiscal policy

This article examines the (macro)economic policy of the European Union (EU) established by the Maastricht Treaty. In the decades since its adoption, European politicians have adopted several legislative measures and an ancillary international treaty designed to put into effect the provisions of this landmark treaty. These were followed by numerous recommendations and implementing decisions. Together, these measures are the result of an arduous balancing act – managing competing pressures arising from the economy, national politics, and supranational politics. The article begins by exploring the foundational ideas and political constraints that shaped the initial policy design. It then illustrates how these tensions have influenced the debates surrounding reform, including the substance, timing, and trajectory of policy changes; the negotiations over preventive surveillance; compliance with recommendations; and the application and effectiveness of procedures to address excessive fiscal deficits. The analysis concludes with an assessment of the most recent overhaul: the 2024 new economic governance framework, which seeks to improve these rules by enhancing fiscal sustainability and flexibility. The article also reflects on future challenges, underscoring the strategic importance of strengthening the EU’s fiscal capacity to support macroeconomic stabilization, resilience, and policy coordination in an increasingly demanding geopolitical and economic landscape.