Enlargement of the European Economic and Monetary Union (EMU)

Background

In September 1996, the IATA Financial Committee established a multi-disciplinary EMU Task Force to provide a coordinated industry-wide approach to addressing the effects of the introduction of the euro on the airline industry.  Following the industry's successful and efficient acceptance of the euro, the EMU Task Force was disbanded and replaced by an EMU Interest Group with the role of monitoring the effects of the euro on the industry systems during the euro transition period.  The Financial Committee disbanded the EMU Interest Group at FC/86.

The industry's preparations for enlargement need to be coordinated from a single point.  However, the protocols required to ready the industry for the euro were in place prior to its introduction on 1 January 1999 and, therefore, preparing the industry for EMU enlargement is a matter of following those protocols.  For this reason, at the FC/90 in March 2004 the Financial Committee decided that no formal panel or working group was required and that the Industry Cash Management Services department would continue to manage this activity.

Industry's Preparations

A survey conducted by Industry Currency Coordination in 2004 identified that the following 6 IATA functions would need to be prepared for the enlargement of EMU:

A meeting was held in October 2004 between stakeholders from each of the 6 IATA functions in order to decide the actions each department had to take as well as the timelines over the next 7 to 8 years. The detailed action plan was circulated to each of the head of departments and is continually updated as soon as new information becomes available.

Current Member States

15 States participate in the Economic and Monetary Union (EMU), i.e. euro is their currency: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Spain.

3 States are part of the EU with a special status, i.e. they do not use euro: Denmark, Sweden, and the United Kingdom.

New Member States

10 new Member States joined the EU on 1 May 2004; Czech   Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovakia and Slovenia. It will be mandatory for these new members to join the EMU and thus adopt the euro. Slovenia, adopted the euro as of 1 January 2007 and Cyprus and Malta have adopted the euro as of 1 January 2008.

2 new Member States joined the EU on 1 January 2007, Bulgaria and Romania.  It will be mandatory for these new members to join the EMU and thus adopt the euro.

It will be mandatory for these new members to join the Economic and Monetary Union in Europe and thus adopt the euro.

Candidate States

Turkey and Croatia formally started negotiations on accessions to the European Union in October 2005. The former Yugoslav Republic of Macedonia is a candidate country (status granted December 2005), which has not yet started accession negotiations yet.

Potential Candidate States