Economic and monetary union was a recurring ambition for the European Economic Community and then the European Union from the 1960s onwards. However, it was a difficult journey, as troubled international currency markets threatened the common price system of the EEC’s cornerstone Common Agriculture Policy and the 1970s oil crisis disrupted attempts to stabilise exchange rates.
The European Monetary System was eventually launched in 1979, preceding 1991’s Maastricht Treaty on European Union and, finally, the launch of the euro, initially as an ‘invisible’ currency in 1999. Three years later, on January 1st 2002, the biggest cash changeover in history took place in 12 EU member states, as they swapped their national currencies for the new money.
Despite predictions that it would inevitably fail, especially in the aftermath of the financial crisis of 2008, when the inability to devalue their currency generated huge political stresses in countries such as Greece and Italy, the new currency has been a success. Today the euro is used in 19 EU countries and is the world’s second largest reserve and traded currency after the US dollar, with more than €1.3tn in circulation.