All About the Currencies

The direct step toward a European currency was taken on March 13, 1979 when the European Economic Community created the ECU, or European Currency Unit, to be the "unit of account" for the European Monetary System (EMS). Described as a "currency basket", it was essentially pooling of member currencies to prevent fluctuations in value.  

In addition to the ECU, the EMS also featured an exchange rate mechanism where each currency had an exchange rate linked to the ECU.  There was also a credit mechanism with each country transferring 20% of its currency and gold reserves to a joint fund. The ECU would survive until the reunification of Germany as well as financial panics in 1992 led to calls for a more unified currency.

The ECU was the direct predecessor of the current Euro.  Three months after its creation, the first direct elections to the European Parliament would take place.  The political and financial framework of modern Europe was now in place.