01 June 2022

onvergence Report reviews Member States' preparedness to join the euro area and paves the way for Croatia's euro adoption on 1 January 2023

The conclusion is set out in the 2022 Convergence Report, which assesses the progress that Bulgaria, Czechia, Croatia, Hungary, Poland, Romania and Sweden have made towards joining the euro area. These are the seven non-euro area Member States that are legally committed to adopting the euro. The Report concludes that:

• Only Croatia and Sweden meet the price stability criterion.
• All Member States fulfil the criterion on public finances, except Romania which is the only Member State subject to an excessive deficit procedure.
• Bulgaria and Croatia are the two Member States fulfilling the exchange rate criterion.
• Bulgaria, Croatia, Czechia and Sweden fulfil the long-term interest rate criterion.

The Report finds that Croatia fulfils the four nominal convergence criteria and its legislation is fully compatible with the requirements of the Treaty and the Statute of the European System of Central Banks/ECB.

The Commission's assessment is complemented by the European Central Bank's (ECB) own Convergence Report, which has also been published today.

Croatia's adoption of the euro

In light of the Commission's assessment, and taking into account the additional factors relevant for economic integration and convergence, including balance of payments developments and integration of product, labour and financial markets, the Commission considers that Croatia fulfils the conditions for the adoption of the euro. It has therefore also adopted proposals for a Council Decision and a Council Regulation on euro introduction in Croatia.

The Council will make the final decisions on Croatia's euro adoption in the first half of July, after discussions in the Eurogroup and in the European Council, and after the European Parliament and the ECB have given their opinions.

The Report, therefore, marks a crucial and historic step on Croatia's journey towards adopting the euro.

Overall assessment of preparedness

In all of the non-euro area Member States examined except Croatia, the Report also finds that national legislation in the monetary field is not fully compatible with EMU legislation and with the Statute of the European System of Central Banks/ECB.

The Commission also examined additional factors referred to in the Treaty that should be taken into account in the assessment of the sustainability of convergence. This analysis shows that the Member States examined are generally well integrated economically and financially in the EU. However, some of them still experience macroeconomic vulnerabilities and/or face challenges related to their business environment and institutional framework which may pose risks as to the sustainability of the convergence process.

The effective implementation of the reforms and investments set out in their national recovery and resilience plans will address key macro-economic challenges. In the case of Hungary and Poland, the plans are currently being assessed by the Commission to make sure that all assessment criteria are being fulfilled.

Members of the College said:

President of the European Commission Ursula von der Leyen said: “Today, Croatia has made a significant step towards adopting the euro, our common currency. Less than a decade after joining the EU, Croatia is now ready to join the euro area on 1 January. This will make Croatia's economy stronger, bringing benefits to its citizens, businesses and society at large. Croatia's adoption of the euro will also make the euro stronger. Twenty years after the introduction of the first banknotes, the euro has become one of the most powerful currencies in the world, improving the livelihoods of millions of citizens across the Union. The euro is a symbol of European strength and unity. Congratulations, Croatia!”

Commission

© European Commission