Europe has signed up to embark upon a monetary union by the end of the century. But, in the complicated 90-page Emu treaty, there is still much fine print to be pored over and acted upon before a single currency is born.

One of the most important hurdles will be working out the exact nature of the second stage of Emu, which will start on January 1 1994.

In contrast to earlier German ideas of making the second stage relatively short in advance of the irrevocable fixing of exchange rates, this 'waiting room' period could be agonisingly long.

Stage two could end as early as January 1 1997 if a majority of EC countries fulfil the necessary economic convergence conditions by then. If not, the final phase of Emu will start from January 1 1999 - with a single currency following several months later.

France and Italy have registered a historic victory by winning 'irreversible' German agreement for a single currency, the Ecu, which would eventually replace the D-Mark. The deal was wrapped up at a dinner in the Dutch town on Sunday night between President Francois Mitterrand and Mr Giulio Andreotti, the Italian prime minister. But there will still be plenty of opportunity for disagreement.

In particular, it is still not clear exactly what form will be taken by the European Monetary Institute (EMI), to be established at the beginning of 1994 as the embryonic European central bank. The EMI will take over the short-term holdings of gold and foreign exchange reserves now pooled together on a temporary basis as part of the European Monetary System (EMS).

In addition to looking after these transactions, the EMI will have the opportunity, according to the treaty, 'to hold and manage foreign exchange reserves as an agent for and at the request of national central banks.' In order to cement the EMI's credentials as a 'central bank in waiting', the Banque de France and the Banca d'Italia can be expected to lodge a significant part of their currency reserves with the EMI.

The Bundesbank and the Nederlandsche Bank, the Dutch central bank, which are both keen to play down the EMI's institutional character, by contrast, will not take this route.

Two questions of great importance concerning the EMI's functions have been left hanging in the air - the site for the institute and the person who will be appointed (from outside the circle of active central bankers) as the organisation's permanent president.

In order to bolster the EMI's credentials as a new body with a mission of its own, it would not be surprising if France were to propose for the post a personality such as Mr Jean-Claude Trichet, head of the French Treasury.

The opening part of the Emu treaty states that the EC's single currency will be the Ecu. This will not be the existing composite 'basket' of EC currencies, but will be the name of a new currency representing irrevocably fixed values of existing national currencies.

However, other parts of the treaty referring to the role of the present basket currency have been watered down compared with early French- and Italian-favoured versions. The draft text issued by the Dutch presidency at the end of October laid down, for instance, that the EMI should 'oversee and promote the development of the Ecu.'

At the insistence of Germany, this clause was quietly dropped in the agreed treaty. Another example of the Germans' misgivings about the Ecu is the view that the final decision on whether the single currency would be called 'Ecu' had not been taken.

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