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Economic and Monetary Union


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Economic and Monetary Union

In 1992 the EU agreed to introduce a single European currency under the supervision of a European central bank. On 1 January 2002, the euro replaced national currencies in twelve of the fifteen Member States of the time. The accession treaties provide for the introduction of the euro in the ten new Member States too, once the economic and structural conditions for this have been fulfilled. Slovenia joined the euro area on 1 January 2007.



The EC Commission submits a three-stage plan for increased monetary cooperation to the Council. The plan envisages the establishment of a currency union by 1971, but the Member States do not take it up..



Following calls by the Heads of State and Government to establish economic and monetary union (EMU), a committee is set up under the chairmanship of Prime Minister Werner of Luxembourg. It draws up a step-by-step programme for establishing EMU within ten years. The stated aim of the plan is to complete the internal market by 1980, to fix the exchange rates and to unite the EC states in an economic and monetary union.



Implementation of the project is hindered by the turbulent events on the international currency markets, which lead to the collapse of the Bretton Woods system, and by the subsequent oil crisis. It is only possible to create the European currency "snake" and the European Monetary Cooperation Fund.



The European Monetary System (EMS) enters into force. Its objective is to create a zone of monetary stability in Europe with stable, but adjustable, exchange rates.



The committee set up by Jacques Delors, the President of the EC Commission, submits a three-stage plan for economic and monetary union, which is approved by the Heads of State and Government. 



The Maastricht Treaty enters into force. A key aspect of the Treaty is the creation in three stages of an economic and monetary union (EMU) with a common currency by 1999.

1st stage: from 1 July 1990

2nd stage: from 1 January 1994

The economic convergence criteria that must be met to qualify for participation in EMU are: low inflation rate, sound public finances, stable currency and low long-term interest rates. European Council decision on the countries eligible to join the third stage of currency union.

3rd stage: from 1 January 1999



The European Monetary Institute is set up with the mission to prepare currency union.



Austria and Sweden join the exchange rate mechanism of the European Monetary System. Finland follows in 1996.

In Madrid, the Heads of State and Government confirm 1 January 1999 as the starting date for EMU. It is agreed that the new currency will be called “euro”.



The EMI is dissolved and the European Central Bank (ECB) established. Wim Duisenberg is appointed the first president of the ECB.

On 31 December 1998 the conversion rates between the national currencies and the euro as from 1 January 1999 are irrevocably fixed. Denmark and the United Kingdom have an opt-out clause and choose not to participate in EMU from the outset.


On 1 January the third stage of EMU – and thus the single European currency policy – begins. The euro is introduced as book money in eleven Member States.



Greece introduces the euro on 1 January.



Introduction of euro notes and coins: from 1 January the euro is legal tender in all twelve countries of the euro area (Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain).



Slovenia joins the euro area on 1 January.


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Date: 28.12.2006