The agreement to form a European Monetary Union was formalized in the Treaty of Maastricht in 1992. This agreement laid the foundation for the creation of a single currency, the euro, and a common economic policy across Europe.
The Treaty of Maastricht was signed by 12 member states of the European Community and entered into force on November 1, 1993. It established the European Union (EU) and created its three pillars: the European Community, the Common Foreign and Security Policy, and Justice and Home Affairs.
The treaty also established the criteria for countries to join the European Monetary Union (EMU). These criteria included maintaining low inflation, a stable exchange rate, a sound fiscal policy, and a low level of government debt. Countries were also required to give up their national currencies and adopt the euro as their common currency.
The creation of the euro was intended to boost trade and investment among participating countries and to make it easier for people and businesses to travel and do business across borders. Since its introduction, the euro has become a major global currency and is used by more than 340 million people in 19 of the 27 EU countries.
However, the euro has also faced criticism and challenges since its inception. Some argue that the strict criteria for joining the EMU have created economic disparities among member states and that a common currency without a single fiscal policy has led to instability in the eurozone.
Despite these challenges, the agreement to form a European Monetary Union was a significant step toward greater economic and political integration in Europe. The Treaty of Maastricht remains a foundational document in the history of the EU and the euro.