1. FROM SINGLE MARKET TO EUROPEAN UNION

2. Monetary Union
Exchange rate stability had been central to western economic and monetary policy since Bretton Woods.
The first attempt to pave the way to a single currency – the 1972 ‘snake in the tunnel’ – failed mainly because of bad timing, and was replaced by the 1979 Economic Monetary System (EMS).
The EMS used an Exchange Rate Mechanism (ERM) based on a European Currency Unit (ecu) whose value was based on a basket of western European currencies. Governments participating in the ERM made efforts to keep national currencies stable within the ERM.

3. Single European Act
Concerns that progress on completing the single market was slow, leading to agreement on the 1986 Single European Act, the first substantial change to the Treaty of Rome.
Coming into force in 1987, its key goal was to remove the remaining physical, technical and fiscal barriers to the single market by the end of The 1985 Schengen Agreement allowed fast-track removal among countries signing the agreement.
New prominence was also given to cohesion policy (balanced economic and social development). It set the target of creating equal employment opportunities and working conditions.

4. International Events
European integration was impacted from the start by international developments.
The fall of the Berlin Wall in 1989 symbolized the end of the Cold War division of Europe, and emphasized the need for the EEC to assert itself on the global stage.
However, the Community’s failure to agree on a common response to both the Gulf War and the crisis in the Balkans in the 1990s undermined its political credibility.
The Community was failing to match its economic power with an international political presence.

5. From Community to Union
The Treaty on European Union (signed in Maastricht, 1992) created the European Union, and outlined a commitment to a single European currency and a common foreign policy.
For some, the controversial treaty raised troubling questions about national sovereignty. The dynamics of the European debate took on a new character.
The term euroscepticism entered the public debate, suggesting hostility to the idea of integration.
There was also talk of a democratic deficit, which referred to the growing gap between the work and power of EU institutions and the ability of EU citizens to impact their work.

6. Enlargement,
There had been no specific policy on enlargement, but as the number of applications for membership of the EEC/EU grew, so a new approach was taken.
In 1993 the Copenhagen conditions were agreed, by which applicants had to be democratic, capitalist, and agree to adopt the entire existing body of the EU laws and policies (the acquis communautaire).
In 1995, Austria, Finland and Sweden joined the EU, taking membership to 15.

7. Enlargement,

8. Unfinished Business
The Maastricht treaty left a number of items of business unfinished, the institutional structure of the EU in particular being strained by the prospect of more enlargement.
The Treaty of Amsterdam (signed 1997, in force 1999) and the Treaty of Nice (signed 2001, in force 2003) made only relatively minor changes.
The 2000 Lisbon Strategy was launched with the goal of making the EU, within ten years, the most dynamic and competitive economy in the world.