Convergence report of the European Commission gives green light for Estonia

The European Commission today adopted its regular Convergence Report on euro readiness. It concluded that Estonia meets the criteria for adopting the euro and made a proposal to the Council to this effect. The Council of EU finance ministers (ECOFIN) will take the final decision on the adoption of the euro in Estonia in July, after Parliament has given its opinion and EU Heads of State and Government have discussed the subject at their summit meeting in June.

>> Convergence report 2010 (in European Economy 3/2010)
>> Press release IP/10/562 Convergence Report 2010 by the Commission assesses readiness of non-euro area EU countries to adopt the euro; proposes Estonia joins euro area in 2011  

Eight other non-euro area Member States not yet ready for the euro

The Convergence Report also shows that the other eight countries with a so-called 'derogation' have made uneven progress on the road to the single currency, and do not meet all the conditions for euro adoption.

Article 140(1) of the Treaty requires the Commission (and the European Central Bank) to assess the fulfillment of the conditions for the adoption of the euro by Member States with a so-called derogation at least every two years or at the request of a Member State.

The Member States with a derogation are currently Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Sweden.

The present report is the latest regular report. The Convergence Reports examine whether Member States satisfy the conditions for adopting the single currency, namely:

• the economic criteria (price stability, sound public finances, exchange rate stability and convergence in long-term interest rates)

• compatibility of national legislation with Economic and Monetary Union (EMU) rules (independence of the national Central Bank, prohibition of monetary financing, compatibility with the statutes of the European System of Central Banks (ESCB) and of the ECB).

The euro was introduced on 1 January 1999. Euro coins and banknotes were introduced as from 1 January 2002. After the adoption of the euro by Slovenia, in 2007, by Cyprus and Malta in 2008, and by Slovakia in 2009, the euro area presently has 16 EU members and around 329 million people out of the EU's total of above 500 million.