Part VI Monetary Unions and other Forms of Monetary Organization, 26 EMU and the Treaty on European Union

Subject(s):

Eurozone — Monetary obligations — Institutional framework of monetary union

This chapter focuses on the European Monetary Union (EMU) and the Treaty on European Union. The introduction of a single currency necessarily required a degree of economic convergence among the participating Member States; such convergence could only be achieved over a period of time. As a result, the Delors Report recommended a three-stage approach to EMU, and this recommendation was adopted when the Treaty on European Union was signed. It is instructive to note that the Treaty thus provided an accelerating momentum towards the ultimate goal of a single currency. The chapter then looks at the selection process for participation within the eurozone, which was governed and determined by tests of an essentially economic character. These tests became generally known as the ‘Maastricht Criteria’. The chapter also considers the accession Member States, as well as the regulation of economic and fiscal policies.