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Enlargement of the eurozone

Adoption of the euro by more countries

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As of 2026, there are 21 EU member states in the eurozone, of which the first 11 (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain) introduced the euro on 1 January 1999 when it was electronic only. Greece joined 1 January 2001, one year before the physical euro coins and notes replaced the old national currencies in the eurozone. Subsequently, the following nine countries also joined the eurozone on 1 January in the mentioned year: Slovenia (2007), Cyprus (2008), Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), Lithuania (2015), Croatia (2023), and Bulgaria (2026).

Five remaining states are bound by the EU treaties to introduce the euro once they fulfil certain economic criteria known as the convergence criteria — the Czech Republic, Hungary, Poland, Romania, and Sweden. Since the convergence criteria requires participation in ERM II for a minimum of two years, and non-eurozone member states are responsible for deciding when to join ERM II, they can delay their compliance with the criteria by not joining ERM II. A 2022 study, based on optimum currency area theory, finds that these non-euro area members fit the euro area as well as the core euro area countries.

All non-eurozone member states are assessed for compliance with the convergence criteria by the ECB and the European Commission biennially, with the most recent report published in June 2024. Member states can also request that their compliance be evaluated outside this two-year cycle as of any month of their choosing, as compliance is subject to change throughout the year. Denmark has a treaty opt-out from the obligation to join the eurozone even if it complies with all criteria; historically this also applied to the United Kingdom, until it left the EU on 31 January 2020.

ECB began a two-year preparation phase for the creation of a new digital euro on 1 November 2023, which has been proposed – but not yet decided – to be introduced as an additional digital payment method coexisting with the currently available four types of euro transactions: cash, payment card, bank account, and other digital payments. If the digital euro is adopted, it will be accessible and accepted as a new extra payment method for citizens in the eurozone, and also available for citizens of the European microstates subject to approval of revised monetary agreements. Any non‑eurozone member state will per article 18 of the proposed Council regulation also be granted the option to adopt the digital euro as a payment method for their citizens – without entering the eurozone, subject to the signing of a digital euro adoption agreement between the ECB and the national central bank of that member state.

Accession procedure

All EU members which have joined the bloc since the signing of the Maastricht Treaty in 1992 are legally obliged to adopt the euro once they meet the criteria, since the terms of their accession treaties make the provisions on the euro binding on them. In order for a state to formally join the eurozone, enabling them to mint euro coins and get a seat at the European Central Bank (ECB) and the Eurogroup, a country must be a member of the European Union and comply with five convergence criteria, which were initially defined by the Maastricht Treaty in 1992. These criteria include: complying with the debt and deficit criteria outlined by the Stability and Growth Pact, keeping inflation and long-term governmental interest rates below reference values, and stabilising their currency's exchange rate versus the euro. Generally, it is expected that the last point will be demonstrated by two consecutive years of participation in the European Exchange Rate Mechanism (ERM II), though according to the Commission "exchange rate stability during a period of non-participation before entering ERM II can be taken into account." The country must also ensure that their national laws are compliant with the ECB statute, ESCB statute and articles 130+131 of the Treaty on the Functioning of the European Union.

Since the convergence criteria require participation in the ERM, and non-eurozone member states are responsible for deciding when to join ERM, they can ultimately control when they adopt the euro by staying outside the ERM and thus deliberately failing to meet the convergence criteria until they wish to. In some non-eurozone member states without an opt-out, there has been discussion about holding referendums on approving their euro adoption. Of the 16 states which have acceded to EU since 1992, the only state to have staged a euro referendum to date is Sweden, which in 2003 rejected its government's proposal to adopt the euro in 2006.

Convergence criteria

The convergence progress for the newly acceded EU member states is supported and evaluated by the yearly submission of the "Convergence programme" under the Stability and Growth Pact. As a general rule, the majority of economic experts recommend for newly accessed EU member states with a forecasted era of catching up and a past record of "macroeconomic imbalance" or "financial instability", that these countries first use some years to address these issues and ensure "stable convergence", before taking the next step to join the ERM II, and as the final step (when complying with all convergence criteria) ultimately adopt the euro. In practical terms, any non-euro EU member state can become an ERM II member whenever they want, as this mechanism does not define any criteria to comply with. Economists however consider it to be more desirable for "unstable countries" to maintain their flexibility of having a floating currency, rather than getting an inflexible and partly fixed currency as an ERM II member. Only at the time of being considered fully "stable", the member states will be encouraged to enter into ERM II, in which they need to stay for a minimum of two years without presence of "severe tensions" for their currency, while at the same time also ensuring compliance with the other four convergence criteria, before finally being approved to adopt the euro.

Criterion fulfilledCriterion potentially fulfilled: If the budget deficit exceeds the 3% limit, but is "close" to this value (the European Commission has deemed 3.5% to be close by in the past), then the criteria can still potentially be fulfilled if either the deficits in the previous two years are significantly declining towards the 3% limit, or if the excessive deficit is the result of exceptional circumstances which are temporary in nature (i.e. one-off expenditures triggered by a significant economic downturn, or by the implementation of economic reforms that are expected to deliver a significant positive impact on the government's future fiscal budgets). However, even if such "special circumstances" are found to exist, additional criteria must also be met to comply with the fiscal budget criterion. Additionally, if the debt-to-GDP ratio exceeds 60% but is "sufficiently diminishing and approaching the reference value at a satisfactory pace" it can be deemed to be in compliance. Criterion not fulfilled

Notes
Reference values for the HICP criteria and interest rate criteria

The compliance check above was conducted in June 2014, with the HICP and interest rate reference values specifically applying for the last assessment month with available data (April 2014). As reference values for HICP and interest rates are subject for monthly changes, any EU member state with a euro derogation has the right to ask for a renewed compliance check at any time during the year. For this potential extra assessment, the table below feature Eurostat's monthly publication of values being used in the calculation process to determine the reference value (upper limit) for HICP inflation and long-term interest rates, where a certain fixed buffer value is added to the moving unweighted arithmetic average of the three EU Member States with the lowest HICP inflation rates (ignoring states classified as "outliers").

The black values in the table are sourced by the officially published convergence reports, while the lime-green values are only qualified estimates, not confirmed by any official convergence report but sourced by monthly estimation reports published by the Polish Ministry of Finance. The reason why the lime-green values are only estimates is that the "outlier" selection (ignoring certain states from the reference value calculation) besides depending on a quantitative assessment also depends on a more complicated overall qualitative assessment, and hence it can not be predicted with absolute certainty which of the states the commission will deem to be outliers. So any selection of outliers by the lime-green data lines shall only be regarded as qualified estimates, which potentially could be different from those outliers which the commission would have selected if they had published a specific report at the concerned point of time.

The national fiscal accounts for the previous full calendar year are released each year in April (next time 24 April 2019). As the compliance check for both the debt and deficit criteria always awaits this release in a new calendar year, the first possible month to request a compliance check will be April, which would result in a data check for the HICP and interest rates during the reference year from 1 April to 31 March. Any EU member state may also ask the European Commission to conduct a compliance check, at any point of time during the remainder of the year, with HICP and interest rates always checked for the past 12 months – while debt and deficit compliance always will be checked for the three-year period encompassing the last completed full calendar year and the two subsequent forecast years. As of 10 August 2015, none of the remaining euro derogation states without an opt-out had entered ERM II, which makes it highly unlikely that any of them will request that the European Commission conduct an extraordinary compliance check ahead of the publication of the next regular convergence report scheduled June 2016.

Additional requirements

During the 2008 financial crisis, Eurozone governments have sought to apply additional requirements on acceding countries. Bulgaria, initially aiming to join the Banking union of the European Union after its ERM accession agreed to enter into closer cooperation with it simultaneously to joining ERM II, requiring its banks to first undergo stress tests. Bulgaria also agreed to reinforce supervision of the non-bank financial sector and fully implement EU anti money-laundering rules. While the reforms from the Cooperation and Verification Mechanism (which applies only to Bulgaria and Romania) were also expected, leaving the CVM is not a precondition.

Changeover plan

Each country aspiring to adopt the euro has been requested by the European Commission to develop a "strategy for criteria compliance" and "national euro changeover plan". In the "changeover plan", the country can select from between three scenarios for euro adoption:

  1. Madrid scenario (with a transition period between euro adoption day and the physical circulation of euro)
  2. Big-bang scenario (euro adoption day coincides with the first day of circulating euro)
  3. Big-bang scenario with phaseout (same as the second scenario, but with a transitional period for legal documents like contracts to be denoted in euro)

The second scenario is recommended for candidate countries, while the third is only advised if at a late stage in the preparational process they experience technical difficulties (i.e. with IT systems), which would make an extended transitional period for the phasing out of the old currency at the legal level a necessity. The European Commission has published a handbook detailing how states should prepare for the changeover. It recommends that a national steering committee is established at a very early stage of the state's preparation process, with the task to outline detailed plans for the following five actions:

  1. Prepare the public with an information campaign and dual price display.
  2. Prepare the public sector's introduction at the legal level.
  3. Prepare the private sector's introduction at the legal level.
  4. Prepare the vending machine industry so that they can deliver adjusted and quality tested vending machines.
  5. Frontload banks as well as public and private retail sectors several months (no earlier than 4 months) ahead of the euro adoption day, with their needed supply of euro coins and notes.

The table below summarizes each candidate country's national plan for euro adoption and currency changeover. All member states are recommended to codify and pass a "Euro Act" featuring the changeover and euro adoption decisions in accordance with the latest edition of their previously published "National Euro Changeover Plan", at least 6 months ahead of its euro adoption day.

Alternative proposals

The European microstates of Andorra, Monaco, San Marino, and the Vatican City are not covered by convergence criteria, but by special monetary agreements that allow them to issue their own euro coins. However, they have no input into the economic affairs of the euro. In 2009, the authors of a confidential International Monetary Fund (IMF) report suggested that due to the 2008 financial crisis, the EU Council should consider granting EU member states which are having difficulty complying with all five convergence criteria the option to "partially adopt" the euro, along the lines of the monetary agreements signed with the microstates outside the EU. These states would gain the right to adopt the euro and issue a national variant of euro coins, but would not get a seat in ECB or the Eurogroup until they met all the convergence criteria. However, the EU has not agreed to this alternative accession process.

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