Economic and Monetary Union (EMU)

EMU is the process of harmonising EU countries’ economic and monetary policies with a view to the introduction of a single currency, the euro. It took place in 3 stages:

• 1990 – 1993: free movement of capital between EU countries, closer coordination of economic policies and closer cooperation between central banks.
• 1994 -1998: convergence of EU countries’ economic and monetary policies (to ensure price stability and sound public finances) and the establishment of the European Monetary Institute (EMI) and, in 1998, of the European Central Bank (ECB).
• 1999 onwards: irrevocable fixing of exchange rates and introduction of the single currency on the foreign-exchange markets and for electronic payments. Introduction of euro notes and coins.

As of January 2015, the euro is the currency of 19 of 28 EU countries.

Since the 2008 crisis, the EU has greatly strengthened its economic governance systems to better detect, prevent, and correct problematic economic trends such as excessive government deficits, public debt levels or macroeconomic imbalances.

Source:  EUR Lex Glossary