A troubled night session in Brussels decided 25 years ago that the European Union would have a common currency: the euro. The history of the euro began in 1957, with the signing of the Treaty of Rome and the creation of the European Economic Community (EEC), between Germany, France, Italy, Belgium, Luxembourg and the Netherlands. The treaty established the European Common Market with the aim of ensuring economic progress and contributing to an ever closer union between the peoples of Europe.
Over the next 30 years, six more countries joined the EEC. In 1973, United Kingdom, Ireland and Denmark; in 1981, Greece; and, in 1986, Portugal and Spain. In 1995 it was the turn of Austria, Finland and Sweden.
scheduled delay
Already in December 1969 the European Community had approved the Werner Plan, in reference to the then Prime Minister of Luxembourg, Pierre Werner. His idea was to implement the European Economic and Monetary Union (EMU) in 1980. However, the monetary turmoil of the 1970s delayed the programme. During this period, affiliated countries contented themselves with monetary cooperation.
The Single European Act, signed in 1986, supplemented the 1957 Treaty of Rome and laid the foundations for EMU, outlining new measures that included the elimination of obstacles between member countries to the movement of people, services and capital , a common policy in the agriculture, fisheries and transport sectors, the approximation of laws, a social policy, incentives for the creation and development of inter-European networks, among others.
In 1992, the Treaty on European Union, or Maastricht Treaty, was signed, establishing the name of the European Union and laying the foundations for the single currency. A decisive step would be taken at a meeting of the European Council between 1 and 3 May.
A troubled night session in Brussels decided on May 2, 1998 (actually it was already the day after, as it was after midnight) that the European Union would have a common currency. Between 1994 and 1999, the European Monetary Institute was created and the name euro was approved for the single currency.
The then Federal Chancellor of Germany, Helmut Kohl, considered the decision of historical importance: “The Economic and Monetary Union is a decisive response to the increasingly fierce international competition, not only between countries, but between large regions of the world. of the area euro, where 300 million live [atualmente, são quase 450 milhões de habitantes] of people earning 20% of the world’s income – a situation comparable to that of the United States”.
Obligation of guarantees
In January 1999, the exchange rates of the participating currencies were irrevocably fixed. The countries participating in the euro area have started to implement a single monetary policy: the euro has been introduced as legal tender and the 11 national currencies of the member countries have become subdivisions of the euro.
The euro became the common currency of Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. In 2001, Greece will join the group. Slovenia will join in 2004 and Malta and Cyprus will join in 2007.
To participate in the Economic and Monetary Union, countries had to meet three criteria. The first was price stability: the average inflation rate should not exceed by more than 1.5% that recorded in the three member countries with the best results in terms of price stability.
Secondly, ensure the sustainability of public finances (budget deficit should not exceed 3% of GDP and public debt could not exceed 60% of GDP). The third criterion concerns the convergence of interest rates (nominal long-term rates should not exceed the average interest rates of the three best-performing member countries in terms of price stability by more than 2%).
Furthermore, each country should respect the normal fluctuation margins of the exchange rate mechanism of the European monetary system, during at least the two years preceding the analysis.
Differences at the ECB
The United Kingdom, Denmark and Sweden are not part of the euro area for internal political reasons. The bone of contention, however, at the May 2, 1998 summit, was the name of the presidency of the European Central Bank (ECB), based in Frankfurt, Germany.
While most member countries backed Dutchman Wim Duisenberg for the eight-year post, France insisted on its own candidate: Jean-Claude Trichet. Consensus was found only after Duisenberg hinted at the possibility of resigning mid-term, due to age.
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Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
