The European Commission (EC) just released the Convergence Report, the basis for the Council of the EU decision on whether a Member State fulfils the conditions for joining the euro area. The report assesses whether Member States that have not yet fulfilled the necessary conditions for the adoption of the euro (so-called Member States with a derogation – Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania and Sweden) have achieved a high degree of sustainable economic convergence, measured in terms of price stability, sound public finances, exchange rate stability and convergence in long-term interest rates.
However, the report concludes that Romania currently fulfils one out of the four economic criteria necessary for adopting the euro: the criteria relating to public finances.
”Romania does not fulfil the price stability, exchange rate and long-term interest rate criteria and legislation in Romania is not fully compatible with the Treaty,” the report reads.
It finds that these Member States generally display considerable nominal convergence, but none of them currently meet all the formal conditions for joining the euro area. Two of these Member States, Bulgaria and Croatia, fulfil all of the convergence criteria, except for the exchange rate criterion as they are not members of the Exchange Rate Mechanism (ERM II).
”The euro was created as the single currency for the whole EU. Therefore euro accession is open for any EU country working towards it. It is true that the road to the euro can appear long and sometimes difficult. The Commission is willing to work together with those Member States committed to getting ready for a successful euro area membership by strengthening their economic and financial systems,” Valdis Dombrovskis, Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services and Capital Markets Union, said.