by Euro Currency Countries List 2023 – The expansion of the euro area is an ongoing process in the European Union (EU). All EU member states, except Denmark, which has negotiated a demobilization, committed to adopting the euro as their single currency after meeting criteria including: meeting the Stability and Growth Council’s debt and deficit criteria. The pacts, keep inflation and long-term public interest rates below a certain reference value, stabilize the exchange rate of their currency against the euro through participation in the European Exchange Rate Mechanism (ERM II) and ensure that their national legislation complies with the Statutes. The ECB, the Statute of the ESCB and articles 130+131 of the Treaty on the Functions of the European Union. The obligation of EU member states to adopt the euro was first described in Article 109, paragraph 1.1j of the 1992 Maastricht Agreement, which binds all new member states in accordance with the terms of their accession agreement.
, there are 20 EU member states in the euro area, of which the first 11 countries (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain) introduced the euro on 1 January 1999. only. Greece joined on January 1, 2001, a year before physical euro coins and banknotes replaced the old national currency in the euro area. Then, on January 1 of that year, eight countries also joined the eurozone: Słowia (2007), Cyprus (2008), Malta (2008), Slovakia (2009),
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Six other countries are on the big agenda: Bulgaria, Czech Republic, Hungary, Poland, Romania and Sweden. Bulgaria and Denmark participate in ERM II,
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Even though Denmark has chosen not to join the Eurozone and is therefore under no obligation to do so. The UK also opted out until it left the EU on 31 January 2020, despite never joining ERM II.
All EU members who have joined the bloc since the Maastricht Agreement in 1992 are legally bound to adopt the euro once they meet the criteria, as their accession agreements are subject to their provisions on the euro. In order for a country to officially join the euro area, mint euro coins, and gain a seat on the European Central Bank (ECB) and the Eurogroup, a country must become a member of the European Union and meet the five convergence criteria set out initially. to the Maastricht Agreement in 1992. These criteria include: respecting the debt and deficit criteria of the Stability and Growth Pact, keeping inflation and long-term public interest rates below reference values and stabilizing the exchange rate against the euro. In general, the latter is expected to be confirmed within the next two years of participation in the European Exchange Rate Mechanism (ERM II),
Although, according to the Commission, “the stability of the exchange rate during the period of non-participation prior to entry into ERM II could be taken into account”.
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The country must also ensure that its national legislation complies with the ECB Statute, the ESCB Statute and Articles 130+131 of the Treaty on the Functions of the European Union.
Since the convergence criteria require participation in the ERM, and non-euro countries are responsible for deciding which of them joins the ERM, they can ultimately control when they adopt the euro while remaining outside the ERM and thus deliberately not meeting the criteria. convergence. . until they do.. In some countries outside the eurozone that do not have an opt-out clause, there is discussion about having a referendum on whether they agree to adopt the euro.
Of the 16 countries that have joined the EU since 1992, the only one that has so far held a referendum on the euro is Sweden, which in 2003 rejected its government’s proposal to adopt the euro in 2006.
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Convergence progress in the newly accepted EU Member States is supported and assessed by the annual presentation of the “Convergence Agenda” under the Stability and Growth Pact. As a general rule, most economists recommend that newly admitted EU Member States with an expected recovery period and a history of “macroeconomic imbalance” or “financial instability” take several years to resolve these issues first and a certain “sustained convergence”. “, before taking the next step to enter ERM II, and as a final step (meeting all convergence criteria) finally adopting the euro. In practice, any EU member state that is not from the euro area can become a member of ERM II at any time, since the mechanism does not dictates any criteria that must be met. Economists, however, believe that it is more desirable than “fragile countries” to retain the flexibility of having a liquid currency than to acquire an inflexible, semi-fixed currency as a member of ERM II. fully “stable”, member countries will find the courage to enter ERM II, in which they must survive at least two years without “significant” movements in exchange rates, while ensuring that four other criteria are met, before finally securing approval to adopt the euro.
Eligible criteria: if the budget deficit exceeds the 3% mark but is “close” to this value (in the past, the European Commission considered 3.5% to be close),
This criterion can still be met if the deficit in the previous two years has decreased significantly to a limit of 3% or the excess deficit is the result of temporary extraordinary circumstances (i.e. expenditures that occur once due to a severe economic crisis or the implementation of economic reforms that are expected to have a positive impact significant impact on the government’s future fiscal budget). However, if these “special circumstances” are found, meeting the fiscal budget criteria requires meeting additional criteria.
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In addition, if the debt-to-GDP ratio exceeds 60% but is “decreasing sufficiently and approaching the reference value at a satisfactory pace”, it may be deemed appropriate.
The previous compliance check was conducted in June 2014, with the IPCA and interest rate reference applying specifically to the last assessment month for which data is available (April 2014). Since the IPCH and interest rate benchmarks change monthly, every EU Member State with the exception of the Eurozone has the right to require new compliance at any time of the year. To further this possible assessment, the table below shows the monthly publication by Eurostat of the values used in the process of calculating the reference values (upper bounds) for IPCA inflation and long-term interest rates, where the arithmetic unweighted moving average of the three countries EU with the lowest IPCA inflation rate (except those classified as “outliers”).
The black values in the table are from officially published convergence reports, while the lime values are only qualified estimates, not confirmed by official convergence reports, but rather from monthly forecast reports issued by the Ministry of Finance. The reason the lime values are only approximations is that the selection of “outliers” (ignoring certain circumstances of reference value calculations), in addition to relying on quantitative judgments, also relies on overall qualitative judgments which are more complicated and therefore unpredictable. with absolute certainty which states the commission deems unusual. Therefore, the selection of any outliers by the lime data line should be considered only as a qualified estimate, potentially different from the outliers the committee would have selected had a particular report been issued at that time.
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National tax accounts for the previous full calendar year are issued annually in April (next time April 24, 2019).
Because compliance checks for debt and deficit criteria are always delayed for publication in the new calendar year, the earliest month to request a compliance check is April, which will result in IPCA data and interest rates in reference. one year period from April 1 to March 31. Each EU member state can also ask the European Commission to conduct a compliance check at any time during the remainder of the year, with IPCA and interest rates always being revised over the last 12 months, while debt and deficit compliance will always be verified within three years. a period that includes the last full calendar year completed and the two projected years thereafter.
As of 10 August 2015, no other non-opt-out euro area countries have joined ERM II.
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Which makes it highly unlikely either of them will seek an extraordinary compliance check from the European Commission before the publication of the next Interim Convergence Report scheduled for June 2016.
After the financial crisis, euro area governments tried to impose additional conditions on accession countries. Bulgaria, which originally intended to join the European Union banking union after joining ERM, agreed to cooperate more closely with it upon joining ERM II, and demanded that its bank
