The founders of the European Community realised as long as fifty years ago that the creation of a common market would one day necessitate a common economic and monetary policy. In the early years, the challenge of such a mammoth task was too great. Attempts were made to coordinate economic policy through consultation with Community institutions, but ultimately the responsibility for formulating policy remained the prerogative of Member States.

In 1969 the Heads of State met at the Hague to officially launch an ambitious initiative for economic and monetary union (EMU). A committee was set up under the chairmanship of Luxembourg Prime Minister and Finance Minister Pierre Werner to map out a timetable for the project. The following year Mr. Werner presented a final report, outlining a three stage plan which by 1980 would fuse national instruments for economic and monetary control into Community instruments to be used for common ends.

In the years that followed, however, the oil crisis, divergence in national economic policies and a weak U.S. dollar conspired to scupper the launch of the second stage of the Werner plan in 1974.

In 1979, new life was breathed into EMU with the creation of the European Monetary System (EMS). Exchange-rate volatility had made European firms wary of making large-scale or long-term investments in other Member States — preventing them from taking full advantage of the common market. In an unprecedented transfer of monetary autonomy, the EMS created a stable, adjustable mechanism for exchange rates by defining central rates in relation to a new "basket" currency — the ECU (short for European Currency Unit, but also the name of a historic French coin).

The experience gained under the EMS was most useful. Exchange rate fluctuations were greatly reduced, ushering in a new era of economic stability between Member States. As inflation rates fell and converged in the mid-1980's, it became clear that the time was right for a new push toward EMU.

In order to complete the single market by completely removing non-tariff barriers to the free movement of goods, capital, services and persons, a single currency was an essential requirement. In 1988, the European Council of Hanover set up a committee under the then-President of the European Commission, Jacques Delors, to make the proposals for the legal and economic arrangements required for the completion of EMU. Mr. Delors recommended a three-stage plan to greater coordinate economic and monetary policies with the intention of creating a European single currency under the stewardship of a European Central Bank. After the first stage of the Delors plan began in 1990, the European Council was convened at Maastricht in 1991. It was there that the Heads of State signed the Maastricht Treaty, which set out the tough economic convergence criteria that had to be met to qualify for the single currency. The third and final stage of EMU started this January 1, 1999. The new single currency wa born.

Euro's Father? 1969! Pierre Werner, Prime Minister of Luxemburg proposes a European single monetary policy.