FRANKFURT, 24 June (Reuters) – European Union countries that are not part of the eurozone have made little or no progress in terms of convergence in recent years and even Hungary, the country most actively discussing membership, does not meet any of the criteria, according to a European Central Bank report released on Wednesday.
All EU members, with the exception of Denmark, have a legal obligation to adopt the common currency, but failure to comply is not penalized. Therefore, only a few are actively working to join, while the majority 🏽prefer to maintain the room for maneuver provided by an independent monetary policy.
“Progress towards meeting the convergence criteria has been hampered by external shocks,” the ECB said in a biennial report, echoing a similar conclusion two years ago and suggesting that progress has essentially stalled.
“Public finances have deteriorated in most countries since the 2024 Convergence Report, with debt-to-GDP ratios in some cases increasing significantly,” the ECB said.
Although Bulgaria joined the currency bloc earlier this year, the five potential countries — the Czech Republic, Hungary, Poland, Romania and Sweden — all appear to be many years away from membership.
Hungary’s new government has promised to meet the conditions, commonly known as the Maastricht criteria, by 2030, but the country is among the furthest away from that goal.
The country has the highest levels of debt and interest rates among the five, while its budget deficit, inflation rate and level of currency volatility are all outside the benchmarks.
Furthermore, the country’s central bank law does not comply with requirements, and it is necessary to improve the rule of law and combat corruption, according to the ECB report.
“Further improving the quality of public institutions and ensuring they are free from undue political interference, tackling corruption, implementing market-friendly policies and safeguarding the rule of law are prerequisites for private sector-led economic growth,” the ECB said about Hungary.
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Hungary also faces structural challenges related to an aging population, as well as emerging imbalances between supply and demand for skills in the labor market, the ECB added.
