Convergence criteria

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This is an article about European Politics, Convergence criteria is also a mathematical term regarding series

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 percentage 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.

[edit] 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
Country ¹	Inflation rate ²	annual government deficit to GDP	gross government debt to GDP	ERM II membership	Interest rate ³		set by the country	recommended by the Commission
Reference value ⁵	max 2.8%	max. 3%	max. 60%	min. 2 years	max 6.2%	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	1.5%	-2% ⁶	50.9%	0 years	3.7%	yes	not yet set	NA	none yet
Slovenia	2.3%	1.9%	29.4%	joined ERM II on 28 June 2004	3.8%	yes	2007	yes	ready
Estonia	4.3%	-2.3% ⁶	4.5%	joined ERM II on 28 June 2004	(4.1%)	yes	2008	TBA	ready
Cyprus	2.3%	2.3%	69.2%	joined ERM II on 2 May 2005	4.1%	yes	2008	TBA	ready
Malta	3.1%	3.2%	74.2%	joined ERM II on 2 May 2005	4.3%	yes	2008	TBA	ready
Latvia	6.7%	-0.1% ⁶	12.1%	joined ERM II on 2 May 2005	3.9%	yes	2008	TBA	ready
Lithuania	2.7% ⁷	0.5%	19.7%	joined ERM II on 28 June 2004	3.7%	yes	2009	TBA	ready
Slovakia	4.3%	3.1%	34.5%	joined ERM II on 28 November 2005	4.3%	yes	2009	TBA	ready
Bulgaria	4.6%	-3.1% ⁶	29.9%	0 years	3.8%	yes	2009-2010	NA	in progress
Czech Republic	2.2%	3.6%	30.4%	0 years	3.8%	yes	unset ⁸	NA	in progress
Hungary	3.5%	10.1%	61.7%	0 years	7.1%	yes	2010-2014	NA	in progress
Poland	1.2%	4.4%	47.3%	0 years	5.2%	yes	2011	NA	in progress
Romania	8.6% ([1])			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 Euro, 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 October 2006 report [2]. To be updated each year.
⁶ Negative deficit value means surplus.
⁷ Inflation reference value of the March 2006 report was 2.6%, thus the non-entrance of Lithuania to the Eurozone on 1.1.2007 despite that it covers the criteria currently.
⁸The Czech Republic worked with an official target date of 2010 until 2006, when both the central bank and the government officially dropped this target rate as unachievable. Some vague discussions about 2015 currently in progress, though no official target date is currently set.
██ criteria fullfilled