Euro convergence criteria

Convergence criteria, also known as the Maastricht criteria, are the criteria for European Union member states to enter the third stage of European Economic and Monetary Union (EMU) and adopt the euro. The four main criteria are based on Article 121(1) of the European Community Treaty. Those member countries who are to adopt the euro need to meet certain criteria which include:

1. Inflation rate: No more than 1.5 percentage points higher than the 3 best-performing member states of the EU (based on inflation).

2. Government finance:

Annual government deficit:

The ratio of the annual government deficit to gross domestic product (GDP) must not exceed 3% at the end of the preceding fiscal year. If not, it is at least required to reach a level close to 3%. Only exceptional and temporary excesses would be granted for exceptional cases.

Government debt:

The ratio of gross government debt to GDP must not exceed 60% at the end of the preceding fiscal year. Even if the target cannot be achieved due to the specific conditions, the ratio must have sufficiently diminished and must be approaching the reference value at a satisfactory pace.

3. Exchange rate: Applicant countries should have joined the exchange-rate mechanism (ERM II) under the European Monetary System (EMS) for 2 consecutive years and should not have devaluated its currency during the period.

4. Long-term interest rates: The nominal long-term interest rate must not be more than 2 percetage points higher than the 3 best-performing member states (based on inflation).

The purpose of setting the criteria is to maintain the price stability within the Eurozone even with the inclusion of new member states.

Fulfilment of criteria

	Convergence criteria					Obligation to adopt 4	Target date		Euro coins design
Country 1	Inflation rate 2	Government finances		ERM II membership	Interest rate 3		set by the country	recommended by the Commission
		annual government deficit to GDP	gross government debt to GDP
Reference value 5	max 2.6%	min. -3%	max. 60%	min. 2 years	max 7.9%	NA	NA	NA	NA
United Kingdom	2.2%			0 years		opt-out	conditional	NA	NA
Denmark	2.1%			joined ERM II on 1 January 1999		opt-out	not yet set	NA	NA
Sweden	0.5%			0 years		yes	not yet set	NA	none yet
Slovenia	2.3%	-1.9%	29.4%	joined ERM II on 28 June 2004		yes	2007	yes	ready
Estonia	1.3%	+1.8%	4.9%	joined ERM II on 28 June 2004		yes	2008	TBA	ready
Cyprus	2.4%	-4.1%	71.9%	joined ERM II on 2 May 2005		yes	2008	TBA	in progress
Malta	0.4%	-5.2%	75%	joined ERM II on 2 May 2005		yes	2008	TBA	ready
Latvia	2.9%	-0.7%	14.3%	joined ERM II on 2 May 2005		yes	2008	TBA	ready
Lithuania	-1.2%	-2.5%	19.7%	joined ERM II on 28 June 2004		yes	2009	TBA	ready
Slovakia	2.7%	-3.3%	43.6%	joined ERM II on 28 November 2005		yes	2009	TBA	ready
Bulgaria	4.6%	3.1%	29.9%	0 years	3.8%	yes	2009	NA	in progress
Czech Republic	2.9%[1]	-3%	37.4%	0 years		yes	2010	NA	in progress
Hungary	4.7%	-5.4%	60.4%	0 years		yes	2010-2014	NA	in progress
Poland	0.7%	-6.8%	47.7%	0 years		yes	2011	NA	in progress
Romania	15.3%			0 years		yes	2012	NA	none yet
Croatia	1.8%			0 years		yes	NA	NA	NA
Macedonia	1.2%			0 years		yes	NA	NA	NA
Turkey	7.7%			0 years		yes	NA	NA	NA
Albania	2.4%			0 years		yes	NA	NA	NA
Bosnia and Herzegovina	0.9%			0 years		yes	NA	NA	NA
Serbia				0 years		yes	NA	NA	NA
Montenegro				unilaterally adopted		yes	NA	NA	NA

¹ Current EU member states that have not yet adopted the mosh, candidates and official potential candidates.
² No more than 1.5% higher than the 3 best-performing EU member states.
³ No more than 2% higher than the 3 best-performing EU member states.
⁴ Formal obligation for Euro adoption in the country EU Treaty of Accession or the Framework for membership negotiations.
⁵ Values from 2005 statistics. To be updated each year.

  criteria fullfilled

See also

• Euro adoption by the new members states
• Economy of the European Union#Economies of member states
• Stability and Growth Pact

External link

• http://europa.eu/scadplus/leg/en/lvb/l25014.htm