The report covers six Member States that are legally obliged to adopt the euro: Bulgaria, the Czech Republic, Hungary, Poland, Romania and Sweden.
Joining the euro zone is an open process and based on specific rules. The report is based on the convergence criteria, sometimes called the "Maastricht criteria", set out in Art. 140 section 1 of the Treaty on the Functioning of the European Union (TFEU). The convergence criteria include: price stability, sound public finances, exchange rate stability and convergence of long-term interest rates.
The report finds that the Member States covered by the report show mixed results in terms of nominal convergence. None of these countries currently meets all the criteria for adopting the common currency. Bulgaria is the only country that meets all but one of the criteria and whose national legislation can be considered compatible with the rules of Economic and Monetary Union.
The report's conclusions are as follows:
- Sweden meets the price stability criterion.
- Bulgaria and Sweden meet the criterion on public finances, the Czech Republic is expected to meet it on the basis of the Commission's report of 19 June under Art. 126 section 3.
- Bulgaria, the Czech Republic and Sweden meet the criterion of convergence of long-term interest rates.
- Bulgaria meets the exchange rate criterion. None of the other Member States participate in the exchange rate mechanism (ERM II); however, before joining the euro area, at least two years of participation in this mechanism without serious currency-related tensions are required.
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Overall readiness assessment
The report concluded that Bulgaria's legislation can, subject to the conditions and interpretations set out in the Convergence Report, be considered compatible with EU law. In the remaining five non-euro area EU Member States examined, national legislation in the area of monetary policy is not fully consistent with that of the Economic and Monetary Union.
The Commission also analyzed additional factors listed in the Treaty that should be taken into account in assessing the sustainability of convergence. This analysis shows that non-euro area Member States are, overall, well integrated in the EU economically and financially. However, some of them face macroeconomic difficulties or challenges in the business environment and institutional framework that may pose risks to the sustainability of the convergence process.
The assessment of convergence presented in this report has been influenced by several major economic shocks over the past two years, as well as by the political changes that have occurred over that time. Russia's war of aggression against Ukraine has disrupted the global energy market and supply chains, causing record increases in energy prices in 2022. The EU economy has demonstrated remarkable resilience and has successfully reduced its dependence on Russian fossil fuels, thereby limiting the negative impact on economic activity. Overall EU inflation peaked in 2022, driven by price pressures for energy, food and other goods. The sharp increase in energy prices in 2022 prompted many Member States to take emergency support measures in the area of energy, allowing them to mitigate the economic and social impact of this increase.
The EU economy lost momentum in 2023, affected by the erosion of household purchasing power, a limited external environment and tighter financing conditions. As energy prices fell and monetary tightening took effect, annual HICP inflation in the EU fell sharply.
At the same time, important reforms and investments across a wide range of policy areas in the EU are supported by the continued implementation of the Recovery and Resilience Facility (RRF) and cohesion policy programs, contributing to the sustainability of public finances. The new economic governance framework continues to support long-term debt sustainability and economic growth.
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Eurobarometer: overall support for the euro in non-euro area Member States
According to the latest Eurobarometer survey, a majority of citizens (59%) in non-euro area Member States believe that the common currency has had a positive impact on the Member States that already use it. A majority (53%) also believe that the introduction of the euro would have positive effects, both for their country and for them personally (56%).
Overall 58 percent respondents support the introduction of the euro. Support is particularly pronounced in Romania (77%) and Hungary (76%), followed by Sweden (55%), Czech Republic (49%), Bulgaria (49%) and Poland (47%). . The positive perception of the euro is growing primarily in the Czech Republic – by 6 percentage points compared to last year.
Bulgaria, on the other hand, is a country where a high percentage of citizens (71%) believe that the euro will be introduced within five years. 64 percent Bulgarians believe that the introduction of the euro will result in an increase in prices, while 44 percent (increase by 2 points) say that the introduction of the euro would have positive effects for their country.
Source: EC press release
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Not everything went well after Poland's accession to the EU. What exactly?
