The “Euro” is the new name of the single currency of the European Community. The EURO is defined in terms of pieces of European currencies, making it a composite currency in origination. Since its creation it has been known as the ECU and has become a currency of denomination for eurobonds and bank CDs. The European Monetary System was launched on March 13, 1979. The system was based on economic averages of the countries in the European Community. The Maastricht Treaty was approved in 1993 and calls for three stages to monetary union in the European Community. The first stage was completed by Jan. 1, 1994. It mandated the elimination of “all restrictions on the movement of capital between Member States, and between third countries”. The next stage began on Jan. 1, 1996, with the creation of the European Monetary Institute (EMI) in Frankfurt, Germany. The EMI is the “Federal Reserve” of Europe, a European Central Bank. The EMI will hold gold and the foreign exchange reserves. It will also administer the operation of the European Monetary System. The treaty called for member countries to have not devalued their currency against any other member country for two years; to have rates of inflation within set ranges; to have a government deficit that doesn’t exceed 3 percent of yearly gross domestic product; and to have long-term interest rates within certain guidelines. With these standards in place the Euro is definitely a real threat to the dollar.