European Monetary Union-EMU
In June of 1998 the European Council initiated efforts to establish a uniificial monetary unit to develop a common econmy across membar states of the European Union (the EU). These efforts lead to the MaastrichtTreaty, setting out a time table and critiria to achieve the EMU and establish a single eruopean currency, to become named the Euro. This was done in three stages. The first stage was to lift all restrictions on the movement of capital among the member states. This was established July 1st 1990. Increased cooperation was also initiated between the central banks, improving convergence of economies of member states. Stage two started in Januaray 1994 with the establishment of the european monetary institute. A ban was then established on central bank credit to the public sector, Increased coordination of monetary policies and there by strengthening the economic convergence. Proceadrues were implimented that lead to independence of the national central banks with the ultimate establishment of the european system of central banks. Stage three began January 1st 1999, the EMU commenced with the irrevokable fixing of exchange rates between member states, putting conduct of a single monetary policy under the European central bank (ECB). This allowed for the introduction of the new currency called the Euro. This new currency was now to be used by all member nations as their only currency. These actions established a single market with a common currency.
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