Definition of Monetary System

The Treaty signed at Paris on 18 April 1951 to establish European Coal and Steel Community (ECSC) was the first step towards the unification of Europe. The signatories to this treaty were Belgium, France, Italy, Luxembourg, the Netherlands and then Federal Republic of Germany. The same six countries later signed the Treaty of Rome on 25 March 1957 to create the European Economic Community (EEC). The objective of this treaty was to establish

In 1972, three other countries, namely, Denmark, Ireland and the UK, also joined, thus taking the strength of the Community to nine. Later, Greece in 1979, and Spain and Portugal in 1986 also joined the Community. At the moment, the European Union has 15 countries as its members after the joining in of Austria, Finland and Sweden.

In 1978, the European Council decided to establish a European Monetary System (EMS). With effect from 1 January 1993, the International European Market has become operational. In 1989, at the Strasbourg Summit, it was decided to convene an inter- governmental conference, whose role would be to revise the treaties relating to the European Community in order to include therein an Economic and Monetary Union (EMU). This Conference has led to the signing of the Maastricht Treaty on 7 February 1992 that aimed, among other things, at the creation of institutions permitting establishment of the EMU. After the Maastricht Treaty, EEC has been renamed as European Union (EU).