European Monetary Union: One money, one Europe?

The monetary unification of 11 of the European Union's 15 Member States took place on January 1, 1999. On January 1, 2002a monetary conversion will begin, with a new single currency, theeuro, replacing the national currencies of the participating Member States over a six-month period. This represents a monumental achievement and one which, for most of the period since Economic and Monetary Union (EMU) was enshrined in the Maastricht Treaty, looked beyond the EU's grasp. Recession and turmoil in the international currency markets in the mid-1990s, combined with popular hostility in northern Europe and fiscal imbalances in the southern states, threatened to derail the project. Only in late 1997 did it become clear that a combination of political determination, notably on the part of southern states and France, which raised taxes and cut government spending in a concerted effort at fiscal consolidation, and unexpectedly strong economic recovery would make EMU possible.