Single Currency of the European Union

The euro is the single currency shared by (currently) 16 of the European Union's Member States, which together make up the euro area. Around 329 million EU citizens now use it as their currency and enjoy its benefits, which will spread even more widely as other EU countries adopt the euro. The process of economic and monetary integration in the EU parallels the history of the Union itself. When the EU was founded in 1957, the Member States concentrated on building a “common market”. However, over time it became clear that closer economic and monetary co-operation was desirable for the internal market to develop and flourish further. But the goal of achieving full EMU and a single currency was not enshrined until the 1992 Maastricht Treaty, which set out the ground rules for its introduction. These say what the objectives of EMU are, who is responsible for what, and what conditions Member States must meet in order to adopt the euro. These conditions are known as the “convergence criteria” and include low and stable inflation, exchange rate stability and sound public finances. In a radical report, the UN Conference on Trade and Development (UNCTAD) has said the system of currencies and capital rules which binds the world economy is not working properly, and was largely responsible for the financial and economic crises. Although a number of countries, including China and Russia, have suggested replacing the dollar as the world's reserve currency.