Economic and Monetary Union (EMU)

In June 1988 the European Council confirmed the objective of the progressive realisation of Economic and Monetary Union (EMU). It mandated a committee chaired by Jacques Delors, the then President of the European Commission, to study and propose concrete stages leading to this union.

The committee was composed of the governors of the then European Community (EC) national central banks; Alexandre Lamfalussy, the then General Manager of the Bank for International Settlements (BIS); Niels Thygesen, professor of economics, Denmark; and Miguel Boyer, the then President of the Banco Exterior de Espa?a.

The resulting Delors Report proposed that economic and monetary union should be achieved in three discrete but evolutionary steps.

Stage One of EMU

On the basis of the Delors Report, the European Council decided in June 1989 that the first stage of the realisation of economic and monetary union should begin on 1 July 1990. On this date, in principle, all restrictions on the movement of capital between Member States were abolished.

Committee of Governors

The Committee of Governors of the central banks of the Member States of the European Economic Community, which had played an increasingly important role in monetary cooperation since its creation in May 1964, was given additional responsibilities. These were laid down in a Council Decision dated 12 March 1990. Their new tasks included holding consultations on, and promoting the coordination of, the monetary policies of the Member States, with the aim of achieving price stability.

In view of the relatively short time available and the complexity of the tasks involved, the preparatory work for Stage Three of Economic and Monetary Union (EMU) was also initiated by the Committee of Governors. The first step was to identify all the issues which should be examined at an early stage, to establish a work programme by the end of 1993 and to define accordingly the mandates of the existing sub-committees and working groups established for that purpose.

Legal preparations

For the realisation of Stages Two and Three, it was necessary to revise the Treaty establishing the European Economic Community (the Treaty of Rome) in order to establish the required institutional structure. To this end, an Intergovernmental Conference on EMU was convened, which was held in 1991 in parallel with the Intergovernmental Conference on political union.

The negotiations resulted in the Treaty on European Union which was agreed in December 1991 and signed in Maastricht on 7 February 1992. However, owing to delays in the ratification process, the Treaty (which amended the Treaty establishing the European Economic Community - changing its name to the Treaty establishing the European Community - and introduced, inter alia, the Protocol on the Statute of the European System of Central Banks and of the European Central Bank (pdf 200 kB, en) and the Protocol on the Statute of the European Monetary Institute) did not come into force until 1 November 1993.
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