EMU (Economic and monetary union)

Roy Jenkins launched the first step towards this goal when, as Commission President in 1979 he launched the European Monetary System.

This consisted of the Ecu - an artificial currency unit - and the Exchange Rate Mechanism, which tied European exchange rates together.

EMU proper was initiated by the Delors Report, which became the basis for the Maastricht Treaty. This laid out three stages towards building a single European currency:

Stage 1 July 1990 - Dec 1993:

• Free movement of capital
• Narrowing of ERM band
• Closer co-operation between central banks
• Closer co-ordination of economic policies

Stage 2 Jan 1994 - Dec 1998:

• Convergence of member states' economic and monetary policies
• Establishment of European Central Bank
• Independence of national banks
• Participating countries fix their exchange rates

Stage 3 Jan 1999 onwards

• Introduction of single currency as an electronic currency
• Launch of euro notes and coins

In many countries, the Maastricht Treaty faced strong opposition and in the end Denmark and the UK won opt-outs from stage 3 of EMU.

But not all the countries, which wanted to join the single currency were allowed to do so - they had to meet strict rules, the so-called convergence criteria, to be eligible.

In 1998 it was decided that 11 of the 15 member states would go ahead with full monetary union - leaving Denmark, Greece, Sweden and the UK outside the eurozone.

In January 1999, financial markets within these 11 countries began operating in euros, as the single currency had come to be known. Two years later, Greece finally met the economic requirements for membership and joined the eurozone in January 2001.

EMU will have reached the end of its long road when, at the beginning of 2002, Euro coins and notes will become legal tender and national currencies will become obsolete.