The European Union was formed in the 1950s to oversee economic and political cooperation between various European countries. The 1970s and 1980s were a time in which the EU grew. After the growth period came to an end in 1986, the union decided to consolidate its powers. In 1987, then Single European Act was signed and set the end of 1992 as the time when a common market would be formed while also putting emphasis on political cooperation in foreign policy.
Although European nations had agreed to various treaties before the early 1990s, this period is generally considered as the time when the modern European Union was formed. This is because the Treaty of Maastricht was signed on 7th February 1992 and put into motion on 1st November 1993. The treaty laid down five goals aimed at unifying Europe is more ways apart from just economically. They are:
Strengthening the democratic governance of member countries.
Improving the efficiency of EU members.
Establishing a financial and economic unification.
Developing the Community social dimension.
Establishing a security policy for member nations.
To achieve these goals, the Treaty of Maastricht put in place several policies to deal with issues such as education, youth, and industry. Additionally, it came up with a single European currency known as the Euro in 1999 in order to facilitate fiscal unification.
The European Union has been significantly successful in achieving the above-mentioned goals. since one of the unions main roles is to oversee economic cooperation between member states, it plays a very influential role in the way business is conducted throughout the continent. It has set up a single market system with low or no tax rates and tariffs, while also encouraging economic development. The Maastricht Treaty set in motion the EUs current economic policy by coming up with a timetable to sanction a three-stage plan for implementing a one market economy across the continent. Stage one of the plan came into effect as soon as the treaty was ratified. It officially stated that the main goal of the EU was to form an EMU (Economic and Monetary Union) of all member countries in which they would endeavor to cooperate better than before in managing their economies.
Stage two of the plan was put in motion in 1994 with the launch of the European Monetary Institute located in Frankfurt, Germany. It was a central banking institution that preceded the European Central Bank, which is now tasked with overseeing control of currencies throughout the EU. It is the heart of the centralized banking system that is also made up of 15 national Central Banks serving as the main bank of respective member nations. A year after the completion of stage two, EU members agreed that stage three would commence on 1st January 1999. On that date, the union officially adopted the Euro currency. Conversion rates in member countries were fixed, while a single foreign exchange rate and monetary policy were implemented. A Euro Zone was formed that was made up of several participating member countries. Between 1999 and 2001, nations in the Euro Zone gradually adopted the conversion to the currency. In the course of that transition period, the Euro was still a non-cash currency. All in all, it was still used in virtually all non-cash transactions such as credit card payments, bank transfers, and money order or check payments.
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