Accession Criteria
In order for a state to formally join the eurozone, enabling them to mint euro coins and get a seat at the European Central Bank and the Eurogroup, a country must be a member of the European Union and comply with five convergence criteria, which were initially defined by the Maastricht Treaty in 1992. These criteria include: complying with the debt and deficit criteria outlined by the Stability and Growth Pact, keeping inflation and long-term governmental interest rates below reference values, and spending a minimum of two years as a member of the European Exchange Rate Mechanism (ERM II) without any devaluation of the fixed central rate for euro exchange. The obligation for all EU member states to adopt the euro is outlined by their accession treaty, and the European Commission decided in 2004 not to allow for any more euro adoption referendums, with the exception of the three countries (UK, Denmark and Sweden) which had previously negotiated such a process as a prerequisite for their adoption of the euro.
The european microstates of Monaco, San Marino and the Vatican City, which had a monetary agreement with a eurozone state when the euro was introduced, were granted a special permission to continue these agreements and to issue separate euro coins, but they don't get any input or observer status in the economic affairs of the eurozone. Andorra negotiated a similar agreement which will permit them to issue euros as early as 1 July 2013.
In 2009 the authors of a confidential International Monetary Fund (IMF) report suggested that in light of the ongoing global financial crisis, the EU Council should consider granting new EU member states which are having difficulty complying with all five convergence criteria the option to "partially adopt" the euro, along the lines of the monetary agreements signed with the European microstates outside the EU. These states would gain the right to adopt the euro and issue a national variant of euro coins, but would not get a seat in ECB or the Eurogroup until they met all the convergence criteria. However, the EU has not made use of this alternative accession process.
| Convergence criteria | |||||
|---|---|---|---|---|---|
| Country | HICP inflation rate |
Budget deficit to GDP | Debt-to-GDP ratio | ERM II member | Long-term interest rate |
| Reference values | max. 2.8% |
max. 3.0% |
max. 60% |
min. 2 years |
max. 3.59% |
|
|
|||||
| Bulgaria | 2.4% | 1.5% | 19.5% | No | 4.50% |
| Czech Republic | 3.5% | 3.5% | 45.1% | No | 2.80% |
| Denmark | 2.4% | 3.9% | 45.4% | 01999-01-011 January 1999 | 1.40% |
| Hungary | 5.7% | 2.5% | 78.4% | No | 7.89% |
| Latvia | 2.3% | 1.7% | 41.9% | 02005-05-022 May 2005 | 4.57% |
| Lithuania | 3.2% | 3.2% | 41.6% | 02004-06-2828 June 2004 | 4.83% |
| Poland | 3.7% | 3.4% | 55.5% | No | 5.00% |
| Romania | 3.4% | 2.8% | 34.6% | No | 6.68% |
| Sweden | 0.9% | 0.0% | 37.4% | No | 1.59% |
| United Kingdom | 2.8% | 6.2% | 88.7% | No | 1.74% |
|
|
|||||
| Croatia | 3.4% | 4.4% | 53.8% | No | 6.23% |
| Iceland | 6.0% | 3.4% | 96.8% | No | 6.87% |
| Macedonia | 2.9% | 3.5% | 31.0% | No | No data |
| Montenegro | 3.9% | 4.0% | 52.0% | No | No data |
| Serbia | 7.3% | 6.7% | 58.1% | No | No data |
| Turkey | 9.0% | 2.4% | 36.8% | No | 8.52% |
|
|
|||||
| Albania | 2.0% | 3.5% | 63.8% | No | No data |
| Bosnia and Herzegovina | 2.2% | 2.8% | 43.7% | No | No data |
| Kosovo | 0.6% | 2.8% | 17.6% | No | No data |
- Notes
Read more about this topic: Enlargement Of The Eurozone
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