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Faculty of History, International Relations, Political Sciences and Communication Sciences International Relations and European Studies
1. Introduction
The Economic and Monetary Union (EMU) is an umbrella term (a term used to describe 'multiple terms' that fall under a single common category) for the group of policies aimed at converging the economies of members of the European Union in three stages so as to allow them to adopt a single currency, the euro. Whilst all 27 EU Member States take part in the economic union, some countries have taken integration further and adopted the euro. Together, these countries make up the euro area. The decision to form an Economic and Monetary Union was taken by the European Council in the Dutch city of Maastricht in December 1991, and was later enshrined in the Treaty on European Union (the Maastricht Treaty). Economic and Monetary Union takes the EU one step further in its process of economic integration, which started in 1957 when it was founded. Economic integration brings the benefits of greater size, internal efficiency and robustness to the EU economy as a whole and to the economies of the individual Member States. This, in turn, offers opportunities for economic stability, higher growth and more employment outcomes of direct benefit to EU citizens. The main aims of EMU are to: To finalize the competition of the internal market by removing exchange rate fluctuations and the cost inherent in exchange transactions, as well as the costs of hedging against currency fluctuation risks; To ensure comparability of costs and prices within the Union, which helps consumers, stimulates intra-community trade and facilitates business; To reinforce Europes monetary stability and financial power by: ending, by definition, any possibility of speculation between the Union currencies ensuring, through the economic dimension of the monetary union thus established that the new currency is largely invulnerable to international speculation enabling the euro to become a major reserve and payment currency All member states of the European Union are expected to participate in the EMU. The Copenhagen criteria are the current set of conditions of entry for states wanting to join the EU. It contains the requirements that need to be fulfilled and the time framework within which this must be done in order for a country to join the monetary union. An important element of this is the European Exchange Rate Mechanism ("ERM II"), in which candidate currencies demonstrate economic convergence by maintaining limited deviation from their target rate against the euro. All member states, except Denmark and the United Kingdom, have committed themselves by treaty to join EMU. Seventeen member states of the European Union, including, most recently, Estonia, have entered the third stage and have adopted the euro as their currency. Denmark, Latvia and Lithuania are the current participants in the exchange rate mechanism. Of the pre-2004 members, the United Kingdom and Sweden have not joined ERM II and Denmark remains in ERM without proceeding to the third stage. The five remaining (post-2004) states have yet to achieve sufficient convergence to participate. These ten EU members continue to use their own currencies.
would reflect the determination they have for future plans. The final stage in the development of the Common Market only meant that there was no turning back from the road to creating a united Europe. This Europe, even if it is composed of states with different nationalities, will become indispensable if a mainspring of development, progress and culture, world equilibrium and peace is to be preserved. The heads of State or Government agreed for their governments to pass from the transitional period to the final stage of the European Community and accordingly to lay down a definitive financial arrangement for the common agricultural policy by the end of 1969. They agreed the each Member State to contribute by their own resources to help finance integrally the Communities budgets, thus making way for the EEC, and increasing and consolidating the powers of the European Parliament. Everyone agreed that on the basis of the Memorandum from 12 February 1969 that a plan in stages would be created by the end of 1970 about creating an economic and monetary union, and to create a European reserve fund for the creation of the union. Interest was reaffirmed in the aspects of putting effort to create the European Atomic Energy Community designed in accordance with the exigencies of modern industrial management, and making it possible to ensure the most effective use of the Common Research Centre. Also interest was shown in establishing a European university, the reforming of a Social Fund, and reaffirmed the commitment on the principle of enlarging the Community, as provided in the Treaty of Rome on article 237.
while concentrating on the first phase. The first stage should commence on 1 January 1971 and cover a period of three years. The main elements were: reinforcement of procedures for consultation and policy co-ordination; further liberalization of intra-Community capital movements and steps towards an integrated European capital market; narrowing of exchange rate fluctuations between Community currencies (creation of the "snake");
After its release, the Werner Report was heavily criticized by the orthodox Gaullists in France, affirming that it was centered on the supranational elements of the Report. It induced a change in the policy of the French government, contributing to a dilution of the proposals of the Report24. Thus, the creation of new Community institutions was dropped.
5. Conclusions
Economic and Monetary Union went through six major stages in which the vision of EMU often was different from one period to the next. Actors pushing for it often included both Member States leaders, expert communities and the Commission. Also the direction was definitely not always towards more integration. Successful integration plans were followed by periods in which the plan did not materialize, after which a much more modest concept of EMU was sought after.
Bibliography
Werner report, EMS and EMU: Problems and Prospects of European Monetary Cooperation by Matthias Kaelberer, Princeton University, Dpt. of Politics National Bank of Belgium working papers research series on the origins of the Franco-German EMU controversies Economic and Monetary Union Memo prepared for the State of the European Union Vol. 8 meetings by Amy Verdun The Process of European Integration from The Hague to Maastricht, 1969-92: An Irreversible Advance? by Michael J. Geary www.cvce.eu The Hague Summit reproduced from the Bulletin of the European Communities, No.1, 1970 Interim report on The establishment by stages of Economic and Monetary Union