Economic and Monetary Union of the European Union

The European Union framework for coordinating members’ economic policies and integrating monetary policy. Its monetary union includes the euro and a shared central bank for participating countries.

European Central Bank: The EU institution responsible for monetary policy in the euro area and for maintaining price stability. It sets monetary policy for euro-area countries, replacing their national central banks’ independent rate-setting.
Werner Report: A 1970 plan proposing a staged European economic and monetary union. It set out an early blueprint for pooling monetary and economic policy.
Eurozone: The group of EU member states that use the euro as their official currency. It is the monetary-union subset of the wider European Union.
European sovereign debt crisis: A period of financial distress in several euro-area countries, especially from 2009 through the early 2010s. It exposed weaknesses in the union’s financial and fiscal arrangements.
Euro: The common currency used by EU member states that have adopted it and by several other countries. It is the shared currency at the center of the monetary union.
European Monetary System: A system established in 1979 to reduce exchange-rate fluctuations among participating European currencies. It preceded the euro by coordinating exchange rates without creating a single currency.
European Union: A political and economic union of European countries with shared institutions and common policies. The economic and monetary union operates within this broader political and economic framework.
European Stability Mechanism: An intergovernmental institution that provides financial assistance to euro-area countries facing severe financing problems. It became a crisis-response tool for members that cannot issue their own currency.
Stability and Growth Pact: An EU framework for coordinating national fiscal policies and limiting government deficits and debt. It sets fiscal rules intended to support stability within the monetary union.
Delors Report: A 1989 report that proposed achieving European Economic and Monetary Union in three stages. Its recommendations shaped the roadmap adopted by European leaders.

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