The Eurozone Crisis. Jean Monnet/Robert Schuman Paper Vol. 12, No. 3, February 2012

The European monetary union was developed and implemented initially with the future objective of a fiscal union, then ultimately a political union. However the current European sovereign debt crisis has highlighted the importance of initially having the framework and gradual implementation of a fiscal union far sooner than is currently being discussed. To put this into context, the 17 member Eurozone was established on 1st January 1999 and on 1st January 2002; all member currencies were replaced with the Euro. In 2007, a year prior to the financial crisis, Jean-Claude Trichet, then president of the European Central Bank (ECB) proposed a fiscal union of Eurozone countries. On January 30th 2012, after the financial crisis, credit crisis and European sovereign debt crisis, 25 of the 27 EU member states signed the fiscal compact treaty on stability, coordination and governance in Economic and Monetary Union. This is after 10 years of the formal implementation of the European Monetary Union