European Monetary Union

European Monetary Union (EMU) Proposed union of European Union (EU) member states who will share common economic policies and a common currency. Member states who meet certain economic criteria will relinquish control of their own money supplies to a European Central Bank, which would take increasing responsibility for the regulation of the money supply. Exchange rates would become fixed and a single European currency, the Euro, created. The “first wave” of the Union is planned for 1999, when international financial transactions will be calculated in Euros. The “second wave”, in 2002, will involve the introduction of Euros to the public and its use as an alternative to national currencies. Not all EU member states will join the EMU. Some will be unable to meet the strict economic criteria; for others, such as the UK, the choice to enter or not is a political issue.