What is the Economic and Monetary Union (EMU)?

In June 1988, the European Council confirmed its objective to establish, through a step-by-step approach, an Economic and Monetary Union (“EMU”). The Council charged a committee, under the presidency of Jacques Delors who was then President of the European Commission, with the responsibility of studying and proposing the steps required in order to build such a Union.

This Committee consisted of the Governors of the national central banks of the European Community as well as Alexandre Lamfalussy, General Director of the Bank of International Settlements, Niels Thygesen, Professor of economics in Denmark and Miguel Boyer, President of the Banco Exterior de España.

The Delors Report, formulated by this Committee, proposed three successive steps to be taken in order to establish the Economic and Monetary Union.

  • Phase I, which began on 1 July 1990 allowed for the abolition of all restrictions on capital movements among Member States;
  • Phase II, which began on 1 January 1994, was underlined by the creation of the European Monetary Institute (EMI), which was followed by the creation of the European Central Bank (ECB) in 1998, as well as the deployment of numerous efforts aiming to further the convergence of economic and monetary policies of the Member States;
  • Phase III, which began on 1 January 1999, initiated the irrevocable fixation of the convergence rates of the currencies of the eleven Member States participating in the monetary union and the implementation of a single monetary policy under the responsibility of the ECB. In 2002, euro coins and banknotes were introduced.