Euro convergence criteria
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This is an article about European politics, Convergence criteria is also a mathematical term regarding series.
| Currency | Code | Central rate | Official target date |
Expected target date |
|---|---|---|---|---|
 British pound |
GBP | — | —[1] | —[1] |
 Bulgarian lev |
BGN | 1.95583[2] | —[3][4] | 2012[5] |
 Czech koruna |
CZK | — | —[3][4] | 2015[6] |
 Danish krone |
DKK | 7.46038 | —[7] | —[7] |
 Estonian kroon |
EEK | 15.6466 | —[3][4] | 1 July 2010 or 1 January 2011[8] |
 Hungarian forint |
HUF | — | —[3][4] | 2014[6] |
 Latvian lats |
LVL | 0.702804 | —[3][4] | 2013[6] |
 Lithuanian litas |
LTL | 3.45280 | —[3][4] | 2013[9] |
 Polish złoty |
PLN | — | 2012[4] | 2013[6][10][11] |
 Romanian leu |
RON | — | 2014[4] | 2014[6] |
 Swedish krona |
SEK | —[12] | —[3] | — |
The euro 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 as their currency. The four main criteria are based on Article 121(1) of the European Community Treaty.
In 2009 the IMF floated a suggestion that countries should be allowed to "partially adopt" the euro - adopting the currency but not qualifying for a seat on the European Central Bank. [13]
Contents |
[edit] Criteria
1. Inflation rate: No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU.
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 two percentage points higher than in the three lowest inflation member states.
The purpose of setting the criteria is to maintain the price stability within the Eurozone even with the inclusion of new member states.
[edit] Fulfilment of criteria
 |
This article may require cleanup to meet Wikipedia's quality standards. Please improve this article if you can. (November 2008) |
| Country [14] | Inflation rate [15] (HICP[16]) | annual government deficit to GDP[citation needed] | gross government debt to GDP | ERM II membership | Interest rate [17] | |
|---|---|---|---|---|---|---|
| Reference value [18] | max 3.2% | max. 3% | max. 60% | min. 2 years | max 6.5% | |
 Bulgaria |
7.8% | -3.2% [19] | 14.1% | 4.7% | ||
 Czech Republic |
2.2% | -1.4% [19] | 28.1% | 4.5% | ||
 Denmark |
2.1% | -3.9% [19] | 30% | since 1 January 1999 | 5.2% | |
 Estonia |
6.6% | -0.4% [19] | 3.4% | since 28 June 2004 | 4.0% | |
 Hungary |
2.9% | -4% [19] | 66.5% | 6.9% | ||
 Latvia |
12.4% | -1.1% [19] | 19.5% | since 2 May 2005 | 5.4% | |
 Lithuania |
10% [20] | -3.2% [21] | 15.6% [21] | since 28 June 2004 [22] | 9.66% [23] | |
 Poland |
3.1% | -2.5% [19] | 44.5% | 5.7% | ||
 Romania |
6.71% | -2.9% [19] | 13.6% | 7.1% | ||
 Sweden |
1.3% | -2.7% [19] | 35.5% | 4.2% | ||
 United Kingdom |
2.3% | 5.5% | 100% | [24] | 0.5% | |
 Albania |
2.4% | 0.04% | 51.4% | 14.1% | ||
 Bosnia and Herzegovina |
1.5% | 0.35% | 34% | 7.17% | ||
 Croatia |
2.9% | 2.2% | 40.8% | 9.33% | ||
 Macedonia |
3.2% | 0.6% | 39.5% | 10.23% | ||
 Montenegro [23] |
3.4% | 38% | 9.09% | |||
 Serbia |
6.8% | 0.48% | 37% | 11.13% | ||
 Turkey |
7.73% | -1.3% [19] | 38.8% | 17% | ||
 Iceland [25] |
18.6% | -5.19% [19] | 103% | 17% | ||
 Norway [25] |
2.2% | -17.27% [19] | 53% | 2% |
criteria fulfilled
[edit] References
- ^ a b The UK negotiated an opt-out from the Maastricht Treaty and is not obliged to join the euro.
- ^ As of January 2009, Bulgaria is not officially part of ERM II. But as the lev was originally pegged to the German mark, it is currently pegged to the euro at the rate shown.
- ^ a b c d e f g There is no official adoption date for this country yet.
- ^ a b c d e f g h "Eighth Report on the practical preparations for the future enlargement of the euro area". European Commission. http://ec.europa.eu/economy_finance/publications/publication13582_en.pdf. Retrieved on 2009-01-07.
- ^ "Bulgaria Says No Need to Speed up Euro Adoption". Sofia News Agency. 9 April 2009. http://www.novinite.com/view_news.php?id=102632. Retrieved on 9 April 2009.
- ^ a b c d e Sparkasse.at (5 August 2008). Euros in the wallets of the Slovaks, but who will be next?. Press release. https://www.sparkasse.at/sPortal/sportal.portal;jsessionid=qhHSJ0FRvFSBNdNpZkKJVhvhHLJD4v1T2d1BG3Gcyj82vJYTDKm3!76983841?_nfpb=true&_windowLabel=LABEL_MAIN&_urlType=action&LABEL_MAIN_sh=181fe8bb390eeff395532e7956f3e368&LABEL_MAIN_action=content.main&LABEL_MAIN_OVERRULEREFRESHBACK=true&LABEL_MAIN_event=changeMain&LABEL_MAIN_chronicleId=%2Febgroup_en_0196%2FChannels%2FPress%2F2008%2F2.QU%2Feb_pi_en_20080508_next_main_Images.akp&LABEL_MAIN_zz=41235.36447435065&LABEL_MAIN_pc=1&_pageLabel=GRID02&cci=09002ee2805dab70&desk=ebgroup_en_0196&navigationId=012130649753268001119092&. Retrieved on 10 January 2009.
- ^ a b Denmark negotiated an opt-out from the Maastricht Treaty and is not obliged to join the euro. However, Denmark will hold a referendum on the opt-outs by 2011 and a target date will be announced if the referendum passes.
- ^ http://www.forbes.com/feeds/afx/2009/03/31/afx6234108.html
- ^ "SEB: no euro for Lithuania before 2013". The Baltic Course. http://www.baltic-course.com/eng/analytics/?doc=7800. Retrieved on 22 December 2008.
- ^ "Poland may hold euro referendum in 2010-Deputy PM". Forbes. http://www.forbes.com/afxnewslimited/feeds/afx/2008/09/18/afx5440142.html. Retrieved on 2008-09-19.
- ^ "Poland may push back euro rollout to 2012". BizPoland. http://www.bizpoland.pl/news/index.php?contentid=172545. Retrieved on 2008-09-19.
- ^ Sweden, while obliged to join the euro under its Treaty of Accession, has chosen not to join ERM II, meaning that Sweden fails the convergence criteria. Swedish political parties have pledged not to join without a referendum in favour.
- ^ Lithuanian PM keen on fast-track euro idea, The Guardian, 2009-04-07
- ^ Current EU member states that have not yet adopted the Euro, candidates, official potential candidates and selected countries with substantial links to the EU.
- ^ No more than 1.5% higher than the 3 best-performing EU member states.
- ^ [1] p. 31
- ^ No more than 2% higher than the 3 best-performing EU member states.
- ^ Values from May 2008 report for Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Slovakia and Sweden. [2]. To be updated each year.
- ^ a b c d e f g h i j k l Negative deficit value means surplus.
- ^ Eurostat. Inflation (HICP all items). [3].
- ^ a b Department of Statistics to the Government of the Republic of Lithuania (Statistics Lithuania). General government deficit and debt. [4].
- ^ European Central Bank. Lithuanian litas included in the Exchange Rate Mechanism II (ERM II). [5].
- ^ a b Bank of Lithuania. VILIBID and VILIBOR. [6].
- ^ United Kingdom participated in the ERM-I from October 1990 to September 1992.
- ^ a b Iceland and Norway have active political debates about joining the EU and adopting euro and are thus included.
[edit] See also
- Enlargement of the eurozone
- Economy of the European Union#Economies of member states
- Stability and Growth Pact
