Although not mentioned explicitly in the Treaty of Rome, which was concluded by the six founding members of the European Economic Community (EEC) in 1957, the use of a common or single currency was an early goal of the European project.

The idea was given momentum by the foreign exchange crisis of 1969, which saw a run on the French franc, and marked the beginning of the ascendancy of the deutschemark.

The key milestones on the way to Maastricht and beyond were:

Initial attempts in the early 1970s foundered because of worldwide financial turmoil in the wake of the collapse of the fixed-exchange rate system and the first oil crisis.

In 1979, the European Monetary System (EMS) was set up which had three elements, the European Currency Unit (ECU), the Exchange Rate Mechanism (ERM) and the credit mechanism.

The ERM aimed to enhance exchange rate stability by obliging members to restrict fluctuations in the exchange rates of their currencies against those of other participants within specified bands. For most members this was 2.25% around a central rate.

Revaluations or devaluations were allowed, but were not supposed to be entered into lightly.

The ERM worked reasonably well over many years for northern European countries, whose economies were linked closely to that of Germany. It was, however, a different matter for both Italy and the UK.

Eventually in the summer of 1993 a run on the French franc forced a revamping of the ERM, with the fluctuation bands being loosened to 30% around central rates.

While such a watering-down could have rendered the Mechanism meaningless, in practice it succeeded in restoring confidence, so that from then until the launch of the euro the currencies of its participants traded in very narrow ranges.

The ECU was a notional currency valued in terms of a basket of fixed amounts of the currencies of nine member states weighted according to shares of GDP and trade.

During the 1980s, the Greek drachma, Spanish peseta and Portuguese escudo were added as these countries joined the EU. It was not, however, a formal currency in the sense that notes and coins were issued.

The project to introduce a single currency was, in essence, part of the wider process of creating a single market across the EU.

In order to work effectively, a single market must allow price transparency, so that producers of goods and services can set prices and consumers can make purchasing decisions with full information about the pricing of alternative goods and services.

Having a multiplicity of currencies with fluctuating rates of exchange therefore inhibits the operation of a free market.

By enhancing the operation of the single market in the EU, it was anticipated that the creation of a single currency would give a boost to trade between member states, as well as improving the efficiency of production through opportunities to realise economies of scale.