The launch of Economic and Monetary Union (EMU) entailed following a previously designed roadmap, which set out the three stages of EMU.
Stage One
Stage One began on 1 July 1990, and saw the removal of the internal restrictions to the free movement of goods, people, services and capital between the Member States of the European Union (EU) and the efforts to advance towards economic convergence through the multilateral monitoring of Member States' economic policies.
Progress was made in revising the founding treaties of the European Economic Community (EEC) to adapt them to the new objectives. The Treaty on European Union (TEU) was signed in Maastricht on 7 February 1992, and came into force on 1 November 1993 following a lengthy ratification process. The new treaty contained the Protocol on the Statute of the European System of Central Banks (ESCB) and of the European Central Bank (ECB) and the Protocol on the Statute of the European Monetary Institute (EMI).
Stage Two
Stage Two began with the establishment of the EMI, the forerunner to the ECB, on 1 January 1994. During this stage, the technical preparations were carried out to introduce the single currency, implement fiscal discipline and enhance the convergence of the EU Member States’ economic and monetary policies.
In December 1996, a series of designs were presented for the banknotes which were to be put into circulation in 2002.
Additionally, the EMI presented the European Council with a report laying the foundations for the creation of the new currency exchange mechanism which was adopted in June 1997 and regulated the monetary and currency exchange relations between euro area countries and the other EU countries.
In June 1997, the European Council also approved the Stability and Growth Pact, designed to guarantee fiscal discipline.
In May 1998, the EU Council decided on the countries that fulfilled the conditions necessary to adopt the euro as their currency: Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, Netherlands, Austria, Portugal and Finland. The governments of the euro area countries appointed the President, Vice-President and the four members of the Executive Board of the ECB.
The ECB was created on 1 June 1998 and devoted the rest of the year to implementing the preparatory work carried out by the EMI.
Stage Three
Stage Three began on 1 January 1999 with the irrevocable fixing of the exchange rates for the currencies of the 11 Member States that initially participated in the EMU and with the adoption of the euro as the single currency. As of that date, the Governing Council of the ECB assumed responsibility for managing the single monetary policy of the euro area.
On 1 January 2001, Greece joined the euro area.
The changeover to the euro was completed on 1 January 2002 when euro banknotes and coins were put into circulation.