The three stages of the EMU

Implementing the EMU involved following a previously designed roadmap, known as the three stages to EMU.

the stages of the conomic and monetary union
Stages	Commencement date	Content
One	1-07-1990	Freedom of capital movements in Community countries. Entry into effect of the European Single Market Independence of community central banks from their respective national governments. Ban on central banks financing public sector authorities or organisations. Financial institutions cannot be obliged to grant public sector authorities or organisations privileged access to financing. Community countries must put into practice multi-annual programmes to guarantee lasting convergence and, in particular, price stability and sound public finances. No modification in the composition of the ECU.
Two	1-01-1994	Creation of the European Monetary Institute Co-ordination of the Member State monetary policies. Fulfilment of the convergence conditions. Before 31 December 1996, the European Council shall decide if the convergence conditions have been fulfilled by a majority of members: If this is the case: a date shall be set for the commencement of stage three. If this is not the case: before 1 July 1998, the European Council shall determine the countries that may proceed to stage three.
Three	1-01-1999	Creation of the European System of Central Banks. Dissolution of the European Monetary Institute. Establishment of a system of irrevocably fixed exchange rates for the euro with the currencies of the incorporated countries. Introduction of the euro as European legal tender, which will progressively replace the community currencies.

Stage One

Stage one of the EMU began on 1 July 1990. Its main features were the removal of internal restrictions to the free movement of goods, people, services and capital between EU Member States and the endeavours to advance towards economic convergence through multilateral monitoring of the Member States' economic policies.

Progress was made revising the constitutional treaties of the European Economic Community to adapt them to the new goals. On 7 February 1992, the Maastricht or European Union Treaty was signed, which came into force, following a lengthy ratification process, on 1 November 1993. The new treaty included a Protocol on the Statutes for the European System of Central Banks and the European Central Bank and the Protocol on the Statute of the European Monetary Institute.

Stage Two

Stage two commenced with the establishment, on 1 January 1994, of the European Monetary Institute (EMI): precursor of the European Central Bank (ECB). During this stage, technical preparations were carried out for the introduction of the single currency, application of budgetary discipline and improvement in convergence of the economic and monetary policies of the EU Member States.

In December 1996, a series of designs were presented for the notes that would be put into circulation in 2002.

Additionally, the EMI presented a report to the European Council, which formed the basis for the creation of a new currency exchange mechanism (ERM II), which was adopted in June 1997 to regulate the monetary and currency exchange relations between the Eurozone and the other EU countries.

In June 1997, the European Council also adopted the Stability and Growth Pact, the purpose of which was to guarantee budgetary discipline in relations with the EMU.

In May 1998, the Council of the European Union determined the countries that had fulfilled the conditions necessary to adopt the euro as their currency (Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland). The governments of the countries in the Eurozone appointed the ECB Executive Board's Chairman, Vice-Chairman and its four board members.

The ECB was created on 1 June 1998 and devoted the rest of the year to putting into practice the preparatory works carried out by the EMI.

Stage Three

Stage three begun on 1 January 1999 with the irrevocable fixing of the exchange rates for the currencies of the eleven Member States that initially participated in the EMU (in May 1998, the EU Council confirmed that eleven of the fifteen EU Member States (Belgium, Germany, Ireland, Spain, France, Italy, Luxembourg, the Netherlands, Austria, Portugal and Finland) met the required criteria to adopt the single currency), and the adoption of the euro as the single currency. From that date, the ECB's Executive Board assumed responsibility for managing the sole monetary policy in the Eurozone.

On 1 January 2001, Greece joined the Eurozone.

The changeover to the euro ended on 1 January 2002, when the euro notes and coins were put into circulation.

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