At the center of interest of this paper is the European Monetary Union and its development. The paper chronologically describes the development and the idea of the European Monetary Union and create its common currency. It's described how the European and Economic Union has expanded. This paper explains the creation of the three phases which will in the final phase introduce the Euro. The tasks of each member country are explained to keep up the monetary union stable while joining the same. The focus is also given to how the European Economic and Monetary Union works, which has its aim to ensure that all EU Member States become a member of the Monetary Union. The work of the European Central Bank as a special institution is described as the headquarter of the Economic and Monetary Union. Through the European Union and its development there have been established, new criteria which are necessary to maintenance the stability of the Monetary Union and they are required for a country to become ready to join the Union and accept the Euro as their currency. This paper described the Euro in what it looks like and what it does. Finally, the path of the Republic of Croatia to the euro area described how it prepared its financial policy since its independence, and what plans it has established through the Ministry of Finance to improve the situation in the country and what awaits it on the way through the European Exchange Rate Mechanism.