New member states and Sweden are unlikely to adopt the euro in the near future, according to convergence reports issued by the Commission and the European Central Bank (ECB). The Commission has urged candidates to step up their efforts.
The convergence report, presented by the Commission on 5 December 2006, revealed that countries are not working hard enough to comply with the criteria for joining the common currency.
The Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovakia and Sweden are expected to join the eurozone, as soon as they meet the criteria. These include keeping inflation low, taming the budget deficit, stable exchange rates and low interest rates. Sweden fell short of joining the common currency following a failed referendum on euro adoption in 2003.
Apart from Slovenia, which will adopt the euro on 1 January 2007, all of the member states that joined in 2004 are having trouble cutting down on government spending and keeping inflation low.
Economic and Monetary Affairs Commissioner Joaquín Almunia encouraged the euro aspirants, saying: “Although the road to the euro is proving more difficult than some may have thought originally, the reward is well worth the effort.”
A separate convergence report, published by the ECB on the same day, is largely in line with the Commission. It gives a mixed evaluation of the countries’ progress, stating that since 2004 “many of the countries under review have made progress with economic convergence, but in some countries there have also been setbacks”. But the ECB also urges a more sustainable approach: “Sustainability is of key importance. Convergence must be achieved on a lasting basis and not just at a given point in time.”