|Printable version||E-mail this to a friend|
Commission releases 2016 Convergence Report
Review of progress towards euro adoption
The 2016 Convergence Report, published yesterday, assesses Member States' progress on moving towards euro adoption. This year's report covers the seven Member States that are legally committed to adopt the euro: Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania and Sweden.
The report is based on the convergence criteria, sometimes referred to as the ‘Maastricht criteria’, set out in article 140(1) of the Treaty on the Functioning of the European Union (TFEU). The criteria include price stability, sound public finances, exchange rate stability and convergence in long-term interest rates. The compatibility of national legislation with Economic and Monetary Union (EMU) rules is also assessed.
The Member States covered in the report have made progress with convergence, but none of them currently meet all conditions for euro adoption:
- All Member States except Sweden meet the price stability criterion.
- Six Member States fulfil the criterion on public finances, while Croatia is still subject to an excessive deficit procedure.
- No Member State fulfils the exchange rate criterion, as none of them are a member of the Exchange Rate Mechanism (ERM II): at least two years of participation is required before joining the euro area.
- All examined Member States fulfil the long-term interest rate criterion.
- Legislation is not fully compatible with EMU rules in most of the Member States covered, except Croatia.
The Convergence Report forms the basis for the Council of the EU' decision on whether a Member State fulfils the conditions for joining the euro area. The Member States that have not yet fulfilled the necessary conditions for the adoption of the euro are referred to in the TFEU as “Member States with a derogation”. The report assesses whether these Member States have achieved a high degree of sustainable economic convergence, in terms of price stability, sound public finances, exchange rate stability and convergence in long-term interest rates. It also assesses the compatibility of their national legislation with EMU rules set out in the Treaty related to the independence of national central banks, the prohibition on monetary financing, and compatibility with the statutes of the European System of Central Banks (ESCB) and of the European Central Bank (ECB). The Convergence Report by the European Commission is complemented by the Convergence Report by the ECB. The two reports are prepared independently, but published in parallel.
Convergence Reports are issued every two years, or when there is a specific request from a Member State to assess its readiness to join the euro area, e.g. Latvia in 2013.
Denmark and the UK, which negotiated opt-out arrangements from the final stage of EMU in the Maastricht Treaty, are therefore not covered by the report.
For more information
- The 2016 Convergence Report: Assessment of Member States regarding the conditions for euro adoption – MEMO
- Convergence Report 2016
- ECB Convergence Report 2016
- Previous Convergence Reports
- The Euro
- Economic and Monetary Union
- Annika BREIDTHARDT (+ 32 2 295 61 53)
- Annikky LAMP (+32 2 295 61 51)
- Audrey AUGIER (+32 2 297 16 07)
Latest News from
EC welcomes European Parliament vote on new EU reform support programme28/04/2017 14:25:00
The EC has welcomed the European Parliament vote to greenlight the Structural Reform Support Programme, a new EU programme to provide technical support to Member States.
Eurogroup Head expects agreement on Greek bailout by end May28/04/2017 14:10:00
MEPs from across the political spectrum urged Greece’s creditors on Thursday to swiftly conclude negotiations over the Greek bailout package, highlighting the pain that Greeks have endured.
Solutions to water problems in Mediterranean region are 'local'28/04/2017 13:25:00
The European Committee of the Regions (CoR) has called for the national governments of the 43 members of the Union of the Mediterranean to give local authorities in the Mediterranean region "a clear role in all bodies responsible for planning and managing river basin districts".
Textile imports: MEPs push for EU rules to curb worker exploitation28/04/2017 13:10:00
EU rules are needed to oblige textile & clothing suppliers to respect workers’ rights, say MEPs in a resolution adopted on Thursday.