On 31 December 1998, leaders of the European Union and the European Monetary Institute (the precursor to the European Central Bank) publicly declared that the euro currency was ready for the next phase of implementation. That announcement followed years of preparatory work on monetary convergence, technical arrangements, and political agreements that were necessary to create a single currency for participating EU member states. Background and convergence criteria The euro emerged from the 1992 Maastricht Treaty, which set out economic and legal conditions for Economic and Monetary Union (EMU). Member states seeking to adopt the single currency had to meet convergence criteria—limits on inflation, government budget deficits, public debt, long-term interest rates, and exchange rate stability—designed to ensure macroeconomic alignment. Throughout the 1990s, candidate countries undertook fiscal consolidation and monetary coordination to meet these criteria. Institutional preparations The European Monetary Institute (EMI) was established in 1994 to strengthen central bank cooperation and to prepare for the transition to a single currency. The EMI and national central banks coordinated technical work on issues such as currency conversion rates, payment and settlement systems, and the design and production of euro banknotes and coins. In June 1998 the European Council selected the member states that would participate in the first stage of monetary union, and the European Central Bank (ECB) was created in June 1998 as the independent institution to conduct euro-area monetary policy. The 31 December 1998 declaration The year-end declaration gave formal political confirmation that the euro project had reached a stage deemed operationally ready. It coincided with the fixing of irrevocable conversion rates between member states’ national currencies and the euro—critical technical steps that allowed for accounting and pricing in euros from 1 January 1999. Although euro banknotes and coins would not enter physical circulation until 2002, the 1999 start marked the euro’s launch as an accounting currency and the beginning of a single monetary policy managed by the ECB. Implications and timeline From 1 January 1999 the euro existed for non-cash transactions, accounting, and electronic transfers in participating countries. National currencies continued as legal tender for cash transactions, but their exchange rates against the euro were fixed and irrevocable. The transition required extensive public- and private-sector adaptation: recalibrating cash machines and accounting systems, dual-pricing displays, and public information campaigns. The physical introduction of euro banknotes and coins in January 2002 completed the transition to a single circulating currency across the initial member states. Legacy The 1998 declaration was a milestone in European integration, marking the conversion of long-standing political commitments into operational reality. It established the institutional framework—centered on the ECB and the euro-area national central banks—for conducting common monetary policy and managing a shared currency. The euro subsequently became one of the world’s major reserve and transaction currencies, but the early decision also sparked debate about fiscal coordination and the governance mechanisms needed to manage asymmetric shocks within a currency union. Notes on sources and accuracy This summary synthesizes established facts about the euro’s institutional origins, the Maastricht convergence requirements, the creation of the ECB, and the stepped implementation (1999 accounting launch; 2002 cash introduction). Specific phrasing of declarations in late 1998 varied across official communiqués and national statements; this account focuses on the operational and institutional milestones that defined the euro’s transition.