Enlargement of the euro area after 1 May 2004

Ten new Member States joined the European Union on 1 May 2004. Two more, Bulgaria and Romania, acceded on 1 January 2007. However, they did not introduce the single currency straight away: the new Member States must first show that they are ready to adopt the euro and meet the "convergence criteria". As soon as these conditions are met, the new Member States will be required to introduce the euro.

ACT

Communication of 10 November 2005 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: First report on the practical preparations for the future enlargement of the euro area [COM(2004) 748 final – Official Journal C 49 of 28.2.2006].

SUMMARY

The introduction of the euro requires careful practical preparation. The European Commission regularly reports on the state of practical preparations for introducing the euro. This communication is the first report intended to inform all interested parties, such as the European institutions, the Member States, the general public and the media. These reports are issued for information purposes only and have no legal value; they should not be confused with the convergence reports.

Preparing for the introduction of the single currency

The introduction of the euro needs to be prepared well in advance. For practical and logistical reasons, the first wave of euro area countries opted for a three-year transitional period between adopting the euro as a currency and putting euro banknotes and coins into circulation. But a "big bang" scenario in which entry into the euro area coincides with the introduction of euro notes and coins could also have its advantages, in particular because the Member States of the European Union are already familiar with euro notes and coins.

Lessons drawn from the previous changeover

The Commission notes that the first changeover to the euro was a success, although there was room for improvement in several respects. Early, thorough preparation is therefore necessary in order to ensure a speedy changeover and public acceptance of the new currency. The Commission takes the view that the transitional period of three years was too long and hopes that euro notes and coins will be introduced swiftly, for the benefit of all parties involved. It would prefer the period of dual circulation to be short.

The Commission also stresses that national authorities must take steps to avoid any impact on prices, for example as a result of shopkeepers and retailers converting prices incorrectly. Active involvement of consumer organisations would be welcome. The authorities could require retailers to publicly display their commitment to making an exact price conversion in order to ensure credibility and enable consumers to bring pressure to bear.

Context

Since the 2004 enlargement wave, several new Member States have joined the euro area:

• Slovenia, on 1 January 2007;
• Cyprus and Malta, on 1 January 2008;
• Slovakia, on 1 January 2009;
• Estonia, on 1 January 2011.

At present, therefore, 17 out of 27 Member States have adopted the euro as single currency.

RELATED ACTS

Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions - Tenth Report on the practical preparations for the future enlargement of the euro area [COM(2010) 398 final – Official Journal C 121 of 19.4.2011].

This Communication details the progress of the latest preparations in Estonia for the introduction of the euro on 1 January 2011. It also presents opinion polls carried out in other Member States which are candidates for adoption of the single currency.

Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions - Ninth Report on the practical preparations for the future enlargement of the euro area [COM(2009) 692 final – Not published in the Official Journal].

This Communication summarises the progress of the practical preparations for the introduction of the euro in the Member States wishing to adopt the single currency. It also provides an overview of the citizens’ opinions on the euro in those same Member States.

Communication of 12 December 2008 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Eighth report on the practical preparations for the future enlargement of the euro area [COM(2008) 843 final – Official Journal C 76 of 25.3.2010].

This Communication presents and evaluates the preparations made in Slovakia for the introduction of the euro: the preparations for the introduction of euro notes and coins, the adaptation of businesses and the public administration to the changeover and the public information campaign on the euro.

Communication of 18 July 2008 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Seventh report on the practical preparations for the future enlargement of the euro area [COM(2008) 480 final – Official Journal C 76 of 25.3.2010]. The Commission presents the progress of the practical preparations for the introduction of the euro in Slovakia, scheduled for 1 January 2009, under a “big bang” scenario. It doubts the efficiency of the existing coordination structure and suggests that the central monitoring of preparations for the changeover to the euro should be reinforced.

Communication of 27 November 2007 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Sixth report on the practical preparations for the future enlargement of the euro area [COM(2007) 756 final – Official Journal C 55 of 28.2.2008].

The European Commission assesses the practical preparations for the introduction of the euro on 1 January 2008 in Cyprus and Malta.

Communication of 16 July 2007 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Fifth report on the practical preparations for the future enlargement of the euro area [COM(2007) 434 final – Official Journal C 246 of 20.10.2007].

The European Commission draws attention to the preparations under way in Malta and Cyprus. The two Mediterranean islands have chosen the “big bang” scenario, whereby euro banknotes and coins are to be introduced at the same time as the euro is adopted as the currency of the Member State concerned. The report also analyses the preparatory work in Slovakia.

Communication of 10 November 2006 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Fourth report on the practical preparations for the future enlargement of the euro area [COM(2006) 671 final – Official Journal C 78 of 11.4.2007].

This report concentrates on the practical preparations in Slovenia, Cyprus and Malta.

Communication of 22 June 2006 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Third report on the practical preparations for the future enlargement of the euro area [COM(2006) 322 final – Not published in the Official Journal].

This report concentrates on the practical preparations in Slovenia. The Commission takes the view that preparations are well advanced but that supplementary measures to increase consumer confidence are required.

Communication of 4 November 2005 from the Commission to the Council, the European Parliament, the European Economic and Social Committee, the Committee of the Regions and the European Central Bank: Second report on the practical preparations for the future enlargement of the euro area [COM(2005) 545 final – Official Journal C 49 of 28.2.2006].

The report takes stock of preparations for the introduction of the euro in the Member States that joined the European Union on 1 May 2004.

See also

• European Commission, Directorate-General (DG) for Economic and Financial Affairs on the euro
• New exchange rate mechanism (ERM-II)

Last updated: 04.11.2011