The European Economic and Monetary Union (EMU) was introduced when the founding members of the European Union (EU) set up a centralised economic system for the supranational body.
The EMU was formed in 1991 and was enshrined in the Treaty on European Union or the Maastricht Treaty. The policies of the EMU are aimed at establishing free trading among EU member states and was also the body behind the adoption of the euro currency.
There are 19 countries in the European Monetary Union, more commonly known as the eurozone, which include: Germany, France, Italy, Spain, Austria, Belgium, Cyprus, Estonia, Finland, Greece, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia and Slovenia.
For a country to join the European monetary union, they have to meet a set criteria of:
- Reasonable price stability
- Sustainable and responsible public finance
- Reasonable and responsible interest rates
- Stable exchange rates
At this point, they’d be allowed to adopt the euro and become governed by the ECB.