FT — Seven countries – Bulgaria, the Czech Republic, Croatia, Hungary, Poland, Romania and Sweden – are under review for membership of the single currency area — a condition of joining the EU, though not for the UK which has an opt-out clause. The ECB said on Tuesday in its annual convergence review that the countries now comply with most of the economic criteria, but all seven fall short of the legal standards needed for membership.
Six of the seven met the standard set out in the Maastricht treaty of inflation being within 1.5 percentage points of the rate in the three eurozone economies where price pressures are weakest.
Most of the member states covered by the review process were close to meeting fiscal criteria, which require public debt to fall within 60 per cent of GDP and deficit to GDP ratios to be lower than 3 per cent.
But none of the seven met legal standards for joining the 19-member currency zone, suggesting enthusiasm for membership is weak.
“Incompatibilities persist regarding central bank independence, in particular central banks’ institutional and financial independence, as well as personal independence,” the ECB said. “In all countries under review, with the exception of Croatia, there are incompatibilities as regards the prohibition of monetary financing and the legal integration of the respective central banks into the eurosystem.”
No country is likely to join in the years ahead, with none of the seven now in the exchange rate mechanism. The mechanism requires movements in the national currency of a would-be eurozone member to closely match those of the euro and a two-year reference period is needed before a country can join the currency union.
