The European Union took another step Saturday toward creating a single currency for its 12 member countries by inaugurating the European Monetary Institute, the forerunner of a European central bank.
The institute, which has no monetary authority, will help coordinate EU monetary policies and encourage use of the European Currency Unit, or ecu.Belgian banker Alexandre Lamfalussy, president of the EMI, said the new organization will work to stabilize exchange rates among members and facilitate economic cooperation among EU nations.
EU countries hope to adopt a single currency by 2000.
The EMI was set up under the Maastricht Treaty, which came into force on Nov. 1, transforming the European Community into the EU. The treaty envisages single monetary, economic, foreign and eventually defense policies among the member states.
EU nations are supposed to meet targets of low inflation and sound public finances. But with the continent in its deepest economic slump in decades, most countries are far from those targets.