From “Communautaire Spirit” to the “Ghosts of Maastricht”: European Integration and the Rise of Financialization

Abstract

The present article addresses the relationship between the process of economic integration of the European Union and the rise of financialization in the continental economy. For that purpose, it analyzes the policies applied and the main macroeconomic indicators of a selected group of countries. The conditions imposed by the Treaty of Maastricht and the Convergence Criteria show a strong neoliberal mark, in alignment with those of the Washington Consensus Agenda, promoting the development of the financial activities and favoring the interest of the financial actors to the detriment of other sectors, such as the industrial and the salaried and middle-income groups. The article also emphasizes the importance of the structural reforms applied, by arguing that it would have been impossible to meet the objectives of the Economic and Monetary Union without a substantial transformation of the European economy. Additionally, the article introduces a novel concept called “the paradox of financialization.” It refers to the increasing dependence of EU economies on the financial sector for economic growth, while the only way for the financial sector to expand is by engaging in riskier and more speculative practices. Consequently, this situation makes economic growth more unstable and cycles more volatile.