Most EU States Outside the Eurozone Fail to Meet Criteria for Euro Adoption
By Jan Strupczewski
Current Status of Euro Adoption Among EU Member States
BRUSSELS, June 24 (Reuters) - The five European Union countries still using their national currencies, but obliged to eventually switch to the euro, do not meet the criteria to adopt the single currency at this stage, the European Commission said in a regular report on Wednesday.
The euro is now used in 21 out of the bloc's 27 countries, by more than 350 million people. Every two years, the Commission prepares a report on the readiness of EU countries still using national currencies to join the EU single currency.
Countries Not Using the Euro
Sweden, Poland, Hungary, Romania, Czechia and Denmark do not use the euro. Denmark has a formal opt-out, but the others committed to switch to it when they joined the EU.
However, they can do that once they meet certain criteria.
Criteria for Euro Adoption
These are low inflation and interest rates, a stable national currency, a budget deficit within EU limits, public debt below 60% of GDP or falling toward that level and central bank laws in line with European Central Bank requirements.
Political and Economic Challenges
For governments that do not want to join the euro for domestic political reasons this provides a convenient excuse, and some deliberately drag their feet on the required criteria.
Country-Specific Progress and Obstacles
Sweden and Czechia
Sweden and Czechia meet all the necessary conditions except putting their national currencies into the Exchange Rate Mechanism II for two years to test their stability. To enter the ERM2 is a government decision, which they choose not to make.
Both also choose not to tweak their central bank laws to meet ECB standards.
Romania
Romania would like to adopt the euro, but is far from the required levels of low inflation, budget deficit, interest rates, currency stability or legal compatibility. But it does meet the debt criterion.
Poland
Poland also meets the debt level condition, but misses all the others and is in no rush to change that for political reasons because it does not want to adopt the euro anytime soon.
Public Opinion on Euro Adoption
The latest Eurobarometer survey showed only 43% of Poles wanted to adopt the euro, compared to 65% of Romanians, 51% of Swedes and 42% of Czechs.
Hungary
Hungarians were the most enthusiastic towards the euro with 80% supporting adoption. After a change of heart that came with the new government in April, Budapest said it wanted to join the euro by 2030, but economists see this as an ambitious target given the poor state of Hungary's economy.
(Reporting by Jan Strupczewski; Editing by Alexander Smith)
