See also:

• Eurosystem
• European System of Central Banks (ESCB)
• European Central Bank (ECB)
• Development of the euro area's monetary policy

ECONOMIC AND MONETARY UNION (EMU)

The Economic and Monetary Union (EMU) is an integral part of the European Union. All the EU Member States participate in the EMU in one way or another. When a country joins the EU, it becomes a country with derogation. Full membership in the EMU is obtained by the adoption of the euro.

The Economic and Monetary Union is founded on two pillars.
The first pillar of the EMU, which concerns all Member States, is the harmonisation of national economic and fiscal policies. To that end, all Member States compile regular economic programmes (stability or convergence programmes) that are then coordinated among themselves and with the European Commission. The programmes are aimed at fulfilling the Maastricht criteria (if the country has not joined the euro area) or adhering to the balanced budget requirements as laid down in the Stability and Growth Pact (in the case of euro area countries). In addition, most of the sub-sectors of economic policy are also coordinated among the Member States and institutions (for more details, see Coordination of Economic Policies).

The second pillar of the EMU is the European Union's single monetary policy, which is implemented by the European System of Central Banks and the European Central Bank. The goal is to maintain a low inflation rate, that is price stability. The single monetary policy is implemented only in those Member States that have fulfilled all the Maastricht criteria and have joined the euro area.

Criteria for joining the Economic and Monetary Union: