‘Following the ill-fated ‘Werner Plan’ for monetary integration, conceived in 1969 during the heyday of the Bretton Woods fixed exchange rate regime and brought down by its subsequent demise in 1973, the European Council (of heads of state or government) was sufficiently emboldened by the apparent success of the European Monetary System and the single market initiative during the late 1980s to reconsider a single currency’. McDonald & Dearden (2005). The introduction of the Single European Act (SEA) in 1986 “marked the beginning of the road to the creation of the euro” Mulhearn and Vane, 2008, Howells & Bain (2005) reiterates that the introduction increased ‘the need for the progressive development of economic and monetary union (EMU)’. The ‘Delores Report’ set out three stages for the achievement of EMU the third stage concluding in the implementation of a single currency across the EMU. ‘Principal recommendations (of the Delores Report) were then incorporated into the Treaty on European Union (TEU or, coequally, the Maastricht Treaty)’. Artis & Nixson (2004).
The Maastricht Treaty also set out ‘convergence criteria’ that each member state of the EMU had to satisfy before adopting the single currency. Artis & Nixson, (2004)‘How sufficient was set out in criteria in relation to fiscal stance (budget deficits and debt burdens), inflation performance, interest rates, and exchange rate stability. How far these were met was judged by the European Council in May 1998 in part on the basis of a Convergence Report (1998)’ Artis and Nixson goes on to say ‘Two countries, Denmark and the UK, had notified the Council prior to the meeting that they did not intend to participate in the single currency in 1999’ Sweden also opted out of the single currency at this stage. This left 11 EU countries Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxemburg, The Netherlands, Portugal and Spain all of which had met the ‘Convergence Criteria’ detailed in the...