The European Union represents an unique economic and political community of European countries that emerged by the signing of the Treaty of European Union which is better known as the Maastricht Treaty. The first ideas about the common territory od European states dates back to the past and the first concrete movements and steps towards its emergence were in the period after the Second World War. The history of the formation of the European Union as it is known today is quite complex, and it has been closely observed and explained in the paper. The countries that were the first ones to unite into a common market and thus take a step closer to the Union were the "big six" which are: France, Germany, Italy, Belgium, the Netherlands and Luxembourg. After the historical events that led to the creation of the European Union, the paper elaborates on the monetary policy of the European Union, the emergence and the process of creating an Economic and Monetary Union in three phases. The Schengen area has been clarified, which is extremely important because it has greatly helped with the implementation of four fundamental freedoms: freedom of movement of goods, providing services, movement of people and movement of capital. They are the most tangible advantage provided by the European Union to countries that are members of the Schengen area. The process of founding the European Central Bank, the history of the emergence and introduction of the euro as the official currency of the European Union are also presented, and the euro area is clearly defined. Great emphasis is placed on the official currency of the European Union – euro. From the history of the origin, the process of introduction and implementation of the currency all the way to the appearance and symbolism of the bills and coins themselves. Finally, a review was made on the very current topic of the implementation of the euro as the official currency in the Republic of Croatia.