The conditions which the Member States must meet, and which the Reports therefore examine, are:

  •  the convergence criteria (price stability, sound public finances, exchange rate stability and convergence in long-term interest rates)
  • compatibility of national legislation with the ‘acquis’ (existing EU legislation) as regards the national central bank, notably its independence and that of the members of its decision-making bodies, its objectives, and its integration into the European System of Central Banks

The Treaty on the Functioning of the European Union (TFEU Article 140) states that at least once every two years, or at the request of a Member State with a derogation (i.e. not participating in the euro area), the Commission and the ECB must report to the Council on the progress made with respect to convergence.

On the basis of its assessment, the Commission submits a proposal to the ECOFIN Council which – having consulted the European Parliament, and after discussion among the Heads of State or Government – decides whether the country fulfills the necessary conditions and may adopt the euro. If the decision is favorable, the ECOFIN Council takes the necessary legal steps and – based on a Commission proposal, having consulted the ECB – adopts the conversion rate at which the national currency will be replaced by the euro, which thereby becomes irrevocably fixed.

EU Member States currently outside the euro area

At present, there are 8 EU Member States that do not participate in the euro area - Bulgaria, Croatia, Czechia, Denmark, Hungary, Poland, Romania and Sweden. Denmark has negotiated opt-out arrangements and will therefore not be the subject of a convergence assessment until they request it.

Convergence reports since 1996