Maastricht, 7 February 1992: Portugal signs the treaty that made the EU

On the evening of 7 February 1992 the foreign and finance ministers of the twelve member states of the European Community met in the Dutch town of Maastricht, in the building that houses the government of the province of Limburg. Their heads of government had agreed the text in the same building two months earlier. The document they had come to sign ran to more than 300 pages.1 source1 source

Two men signed for Portugal. In the treaty's list of plenipotentiaries, under “the President of the Portuguese Republic”, come João de Deus Pinheiro, Minister for Foreign Affairs, and Jorge Braga de Macedo, Minister for Finance. Their names follow those of the Dutch pair, Hans van den Broek and Willem Kok.1 source1 source

Portugal also chaired the occasion. Since the start of the year it had held the six-month rotating presidency of the Community for the first time, and its prime minister, Aníbal Cavaco Silva, came to Maastricht as President of the Council, alongside the Dutch prime minister Ruud Lubbers, under whose presidency the treaty had been concluded. Cavaco Silva later wrote that he had had the honour of presiding over the signing ceremony.3 sources3 sources

According to the Luxemburger Wort, whose German report is quoted here in an English translation, Cavaco Silva called the outcome of the sometimes heated negotiations “a reasonable balance between ambition and caution” and said the Community would in future be able to act more energetically on the international stage. Not everyone was pleased. Egon Klepsch, the newly elected President of the European Parliament, said the treaty had “weaknesses, shortcomings and uncertainties”, above all because it gave the Parliament too little say.1 source1 source

The treaty renamed the club and widened its ambitions. It created the European Union, a citizenship shared by the nationals of every member state and a timetable for a single currency. For Portugal, one of the four members poor enough to qualify, it also promised a new fund to help the less prosperous states keep up.3 sources3 sources

Portugal had joined the European Community with Spain on 1 January 1986, after negotiations that opened in 1978. By 1992 the Community had twelve members, and each took a six-month turn chairing the Council, where national ministers make decisions. Portugal's first turn ran from January to June 1992, when it had been a member for only six years.3 sources3 sources

Its government was in a strong position. Aníbal Cavaco Silva, an economist and leader of the centre-right Social Democratic Party (PSD), had been prime minister since 1985 and had won two absolute majorities in a row. Over ten years in office he took part in 29 European Councils, the summits of heads of government.2 sources2 sources

The treaty grew out of the upheavals of 1989 to 1991. Cavaco Silva later traced it to Mikhail Gorbachev's reforms in the Soviet Union and the reunification of Germany in October 1990. There was an economic logic too: in his view, a single market where a dozen currencies could still be devalued against each other was open to competitive devaluations and the quarrels they caused.1 source1 source

Portugal's priority was money for development. Since the Single European Act added economic and social cohesion to the Community's aims, Lisbon had pushed for transfers to the poorer regions, usually alongside Spain, Ireland and Greece. For 1989 to 1993 Portugal was allocated ECU 9.2 billion from the Community's structural funds, the third-largest amount after Spain and Italy.2 sources2 sources

The first article set the tone: “By this Treaty, the High Contracting Parties establish among themselves a European Union.” The Union rested on the existing Communities, plus two new fields where governments would cooperate: a common foreign and security policy, and justice and home affairs. Klepsch disliked this design of “three pillars”, because the two new fields stayed largely outside the control of the Community's institutions.2 sources2 sources

Citizenship came with specific rights. A Portuguese citizen could move to and live in any member state. Living in, say, Luxembourg, they could vote and stand in its municipal elections and in elections to the European Parliament there, on the same terms as locals. Outside the Union, in a country where Portugal had no embassy or consulate, they could seek help from those of any other member state, and they gained the right to petition the European Parliament and to complain to a new European Ombudsman.1 source1 source

The treaty also wrote down a calendar for economic and monetary union. Its second stage would begin on 1 January 1994. If the leaders had not set a start date for the third stage by the end of 1997, it would begin automatically on 1 January 1999, with exchange rates fixed for good and a single currency run by a European System of Central Banks whose first objective was price stability. The treaty called that currency the ECU; it arrived under the name euro.2 sources2 sources

Two clauses mattered most in Lisbon. Article 130d required a Cohesion Fund to be set up before 31 December 1993 to pay towards environmental and transport projects, and a protocol limited it to states with a gross national product per head below 90% of the Community average that ran a programme to meet the convergence tests. And a short Protocol on Portugal let the country keep an interest-free credit line that the Banco de Portugal gave to the autonomous regions of the Azores and Madeira, while committing Portugal to end it as soon as possible.1 source1 source

Portugal did not get everything it asked for. Cavaco Silva later recalled that Portugal argued, without success, for a shared stabilisation mechanism to cushion a member state hit by an economic shock of its own, once it could no longer respond with its own currency and interest rates.1 source1 source

The signing was one event in a crowded half-year. Four days later, on 11 February, the European Commission presented the “Delors II package”, a programme and budget that put numbers on the promised Cohesion Fund. Jacques Delors, the Commission's president, told the European Parliament that the fund would help member states meet the convergence criteria for monetary union.1 source1 source

The biggest piece of business was farming. On 21 May the agriculture ministers, chaired by Portugal's agriculture minister Arlindo Cunha, reached political agreement on a reform of the common agricultural policy (CAP) proposed by the agriculture commissioner, Ray MacSharry. It made prices, above all for cereals, more competitive and paid farmers direct aid instead. MacSharry called the break in the link between price support and production the essential change.3 sources3 sources

Cunha later wrote the history of the deal with the economist Alan Swinbank. Their account says the reform, adopted under a Portuguese presidency despite the opposition of farm lobbies and the early hostility of many member states, fundamentally changed the shape of the CAP. Whilst it did not cut the policy's cost, it let the Community accept the farm deal then emerging in the Uruguay Round of world trade talks.2 sources2 sources

On 2 May the Community and the countries of the European Free Trade Association (EFTA) signed the treaty creating the European Economic Area in Porto. The same day Guimarães hosted a meeting with the Mercosur countries of South America. At Lisbon in June the leaders said the EEA had opened the way to membership talks with the EFTA countries that wanted to join. Austria, Finland and Sweden joined on 1 January 1995.2 sources2 sources

The wars that broke up Yugoslavia hung over the presidency. José Cutileiro, a Portuguese diplomat born in Évora, coordinated the Community's peace conference on the former Yugoslavia during the Portuguese term, and was sent to Serbia and to Bosnia and Herzegovina.2 sources2 sources

As the Community's envoy, Cutileiro chaired talks between the leaders of Bosnia's three main national parties. On 18 March 1992 they produced a statement of principles, sometimes called the Carrington–Cutileiro plan, for an independent Bosnia made up of three constituent units based on national lines. The parties adopted it but never signed it, the Bosnian presidency later rejected it, and war broke out in Bosnia that year. In June the leaders meeting in Lisbon adopted a declaration on Yugoslavia.2 sources2 sources

Then, on 2 June, Danish voters rejected the treaty in a referendum by 50.7% to 49.3%, a margin of 46,847 votes. Three weeks earlier their parliament had approved it by 130 votes to 25. The presidency had to keep the other eleven on course, and the foreign ministers met in Oslo on 4 June.3 sources3 sources

On 18 June Irish voters approved the treaty, by more than two-thirds of those voting. At the Lisbon European Council on 26 and 27 June the leaders welcomed the Irish result, confirmed the conclusions reached in Oslo and insisted on the ratification timetable, which aimed at entry into force on 1 January 1993.3 sources3 sources

Lisbon did not settle the budget. The leaders decided to set up the Cohesion Fund early in 1993 for the states below 90% of average national product per head, and left the rest of the Delors II package to the Edinburgh summit in December. The new conference centre of the Centro Cultural de Belém in Lisbon hosted the presidency.3 sources3 sources

The Danish vote stirred a debate in Lisbon. In July 1992 a small group of activists from the left and the right handed out leaflets and collected signatures for a referendum on a shopping street near the Praça do Comércio, where banners joining the Portuguese and European flags hung on the ministries. Cavaco Silva said no. The largest parties backed the treaty, he argued, and voters had elected parliament to decide such matters.1 source1 source

The campaigners faced a legal wall: the constitution then ruled out referendums on international treaties. It was already being revised to make room for Maastricht. On 17 November 1992 parliament approved the third revision of the 1976 constitution, intended to allow ratification. It let citizens of other member states living in Portugal vote in European elections and opened the way to a single currency. The PSD and the Socialists voted for it. The 13 Communist deputies, the single Green, the four CDS deputies and two independents voted against, and the one deputy of the National Solidarity Party abstained.2 sources2 sources

On 10 December parliament approved the treaty itself for ratification, and Portugal deposited its instrument of ratification with the Italian government on 16 February 1993.2 sources2 sources

Denmark held a second referendum on 18 May 1993, on the treaty together with the special arrangements agreed for Denmark at Edinburgh, and 56.7% voted yes. It deposited its ratification on 17 June 1993, the United Kingdom on 2 August and Germany, the last, on 13 October. The treaty came into force on 1 November 1993, ten months later than the leaders had planned in Lisbon.3 sources3 sources

The compromise came at Edinburgh on 11 and 12 December 1992. For 1994 to 1999 the leaders set aside about ECU 153 billion for the structural funds and ECU 15 billion for the new Cohesion Fund, together a third of the Community budget and, year for year, double the sums of the previous period. The Cohesion Fund regulation, adopted in May 1994, gave it ECU 15.15 billion. It could pay up to 85% of the cost of large environmental and transport projects, and its money went to Greece, Ireland, Portugal and Spain.2 sources2 sources

For Portugal the result was almost a doubling. Its share of the structural and cohesion funds rose from ECU 9.2 billion in 1989 to 1993 to ECU 18.2 billion in 1994 to 1999, a period one year longer. The Commission estimated that the structural funds added 4.7% to Portugal's real GDP over that period, the largest figure it gave for any country, and listed among the results of rail investment a journey between Lisbon and Faro shortened by 1 hour 35 minutes.1 source1 source

From the moment of signing, meeting the Maastricht convergence criteria became the immediate priority of economic policy in Portugal, according to Carlos da Silva Costa, a later governor of the Banco de Portugal. The first step came two months after Maastricht: on 6 April 1992 the escudo joined the exchange rate mechanism of the European Monetary System, with a wide band of 6% either side of its central rate.2 sources2 sources

In the currency storms of 1992 and 1993 the escudo's central rate was realigned more than once, a story told in our article on the escudo's conversion rate. By early 1998 Portugal had passed the tests. On 3 May 1998 the leaders found that its inflation in the year to January 1998 had averaged 1.8% and its long-term interest rate 6.2%, below reference values of 2.7% and 7.8%, and that it was not subject to an excessive deficit decision.3 sources3 sources

Eleven countries qualified, Portugal among them, and the euro was launched on 1 January 1999. Greece did not yet meet the conditions, and Sweden had never joined the exchange rate mechanism. The United Kingdom had an opt-out written into the treaty, and Denmark had notified that it would not take part, as agreed at Edinburgh after its no vote.1 source1 source

Cavaco Silva, whose government prepared the country for the euro, described the choice as a cost-benefit calculation. The gains were the end of exchange-rate risk, cheaper borrowing and a place in the Union's core. The cost was the loss of the national tools of monetary and exchange-rate policy, plus tighter limits on budgets. In a 2018 lecture he blamed later policy errors, not the euro itself, for the near-bankruptcy that led Portugal to a €78 billion rescue loan in 2011.1 source1 source

Much of what Maastricht created is part of everyday life in Portugal. The euro is the currency. Citizens of other EU countries who live in Portugal vote in its local and European elections, and Portuguese living elsewhere in the Union can do the same where they live, under rights first written into the 1992 treaty and the constitutional revision that followed.2 sources2 sources

The Cohesion Fund still exists on the rule set at Maastricht, paying for environmental and transport projects in member states whose national income per head is below 90% of the EU average. For 2021 to 2027 Portugal is one of fifteen countries that qualify. Of the four original recipients, only Greece is still on the list with it.1 source1 source

The presidency of 1992 was the first of four. Portugal chaired the Council again in 2000 under António Guterres, in 2007 under José Sócrates, when the Treaty of Lisbon was signed, and in the first half of 2021.1 source1 source