HL Deb 15 July 1992 vol 539 cc27-8WA
Lord Butterworth

asked Her Majesty's Government:

Whether they will define the terms "convergence" and "cohesion" as used in the Treaty on European Union, Maastricht 1992.

The Earl of Caithness

The distinction between cohesion and convergence is an important one. Cohesion means achieving a satisfactory level of economic and social development across the Community (the objective in Article 130A of the Treaty of Rome). Convergence means establishing a stable macroeconomic environment, based on sound public finances and price stability, in each member state; ensuring that the different EC economies could move to, and operate within, a single currency (Article 109J of the Maastricht Treaty and the protocol on convergence).

The link between the two is that responsible economic policies pursued by member states—in particular, low inflation; sound public finances; and structural reform leading to a flexible economy, are the best way of strengthening cohesion and promoting convergence.

The difference between them is that convergence in particular of interest rates, public deficits, inflation and structural reform is necessary for the effective operation of a single currency. Cohesion—i. e., reduced disparities in living standards—important though it is as an objective of the Community, is not.