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10/10/13

A brief history of EMU

After the ravages of World War II, European countries wished to make future conflict on the continent unthinkable. There was also a pragmatic need for them to co-operate in order to rebuild their devastated countries. Out of these two driving forces, what would become known as the European Union was conceived.

Timeline

Since the earliest days of European integration, the idea of European economic and monetary union with a single currency has been around. Today’s Economic and Monetary Union (EMU) began the first of the three major stages of its evolution in 1990 when EU Member States committed themselves to establishing a functioning EMU and agreed a number of economic convergence criteria to make it reality.

After the Maastricht treaty entered into force in 1993, the second stage began in 1994, with the establishment of the European Monetary Institute, the precursor for the European Central Bank (which was launched in 1998). In 1997, EU leaders agreed the Stability and Growth Pact which set certain parameters to ensure the necessary budgetary discipline for the final stage, the creation of the euro area and the euro.

In May 1998, 11 Member States agreed to take the final step and launched the euro on 1 January 1999. In 2002, euro notes and coins were introduced into circulation. Today, the euro is the national currency of 15 EU Member States and, together with the US dollar, one of the major global currencies.