members still use their own currency today.
Among the European states, EMU officially stands for Economic and Monetary Union. Other countries also use EMU to refer generally to the European Monetary Union. EMU is the agreement among the participating member states of the European Union to adopt a single hard currency and monetary system. The European Council agreed to name this single European currency the Euro. The European states decided that the EMU and a single European market were essential to the implementation of the European Union, which was created to advance economic and social unity among the peoples of Europe and to propel Europe to greater prominence in the international community.
2. HISTORY OF THE EMU
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The road to EMU
First ideas of an economic and monetary union < in Europe were raised well before establishing the European Communities <. For example, already in the League of Nations <, Gustav Stresemann < asked in 1929 for a European currency against the background of an increased economic division due to a number of new nation states in Europe after WWI <.
Economic and monetary union was a recurring ambition for the European Union from the late 1960s onwards because it promised stability and an environment for higher growth and employment. p> The road towards today's Economic and Monetary Union and the euro area can be divided into four phases:
Phase 1: From the Treaty of Rome to the Werner Report, 1957 to 1970
The international currency stability that reigned in the immediate post-war period did not last. Turmoil on international currency markets between 1968 and 1969 threatened the common price system of the common agricultural policy, a main pillar of what was then the European Economic Community. In response to this troubling background, Europe's leaders set up a high-level group led by Pierre Werner, the Luxembourg Prime Minister at the time, to report on how EMU could be achieved by 1980.
Phase 2: From the Werner Report to the European Monetary System, 1970 to 1979
The Werner group set out a three-stage process to achieve EMU within ten years, including the possibility of a single currency. The Member States agreed in principle in 1971 and began the first stage - narrowing currency fluctuations. However, a fresh wave of currency instability on international markets squashed any hopes of tying the Community's currencies closer together. Subsequent attempts at achieving stable exchange rates were hit by oil crises and other shocks until, in 1979, the European Monetary System (EMS) was launched. h3> Phase 3: From the start of EMS to Maastricht, 1979 to 1991
