This document is an excerpt from the EUR-Lex website
2022 European Commission convergence report
2022 European Commission convergence report
2022 European Commission convergence report
- Date of last review:
- 09/08/2022
- Responsible entity(ies):
- Directorate-General for Economic and Financial Affairs
- Summarised document(s):
- Summary code:
-
- 14.05.02.02 Convergence Reports – progress of non-euro area countries on meeting euro adoption criteria
- EUROVOC descriptor:
- Directory code:
2022 European Commission convergence report
SUMMARY OF:
WHAT IS THE AIM OF THE REPORT?
The convergence report prepared by the European Commission is based on Article 140(1) of the Treaty on the Functioning of the European Union (TFEU), which requires the Commission and the European Central Bank (ECB) to report to the Council of the European Union at least once every 2 years, or at the request of a European Union (EU) Member State, on the progress Member States are making towards meeting the criteria for adopting the euro. The report:
- analyses the progress which Bulgaria, Czechia, Croatia, Hungary, Poland, Romania and Sweden made in fulfilling their obligations regarding the achievement of economic and monetary union;
- focuses on the compatibility of national legislation with the TFEU and assesses economic performance against the four convergence criteria that are set out in detail in Protocol No 13 of the TFEU, while also taking into account other factors relevant to convergence, e.g. the balance of payments developments and market integration;
- is accompanied by an independent convergence report prepared by the ECB.
KEY POINTS
The analysis examines whether:
- the Member States’ legislation, including the statutes of their national central bank, is compatible with Articles 130 and 131 TFEU and with the statute of the European System of Central Banks and of the ECB;
- the Member States meet the convergence criteria of:
- a high degree of price stability, measured by an average annual rate of inflation no more than 1.5 percentage points above the three best-performing Member States (France, Finland and Greece), calculated as 4.9% in April 2022,
- sustainable government finances, determined by the absence of an excessive deficit against the Member State concerned,
- exchange rate stability, with the Member State respecting the normal fluctuation margins provided for by the European Monetary System’s exchange rate mechanism without severe tensions for at least the previous 2 years and not having devalued its currency against the euro on its own initiative,
- convergence of long-term interest rates, achieved by maintaining average long-term interest rates for a year which do not exceed by more than two percentage points those of the three best-performing EU economies in terms of price stability, calculated to be 2.6% in April 2022.
The COVID-19 pandemic, the measures taken in response to the crisis, the surge in commodity prices, the supply bottlenecks and the robust recovery in 2021 have had a significant impact on some of the economic convergence indicators used in this report, especially the assessment of price stability. Together with Russia’s invasion of Ukraine, they continue to create exceptional uncertainty. The Commission therefore decided not to take a decision on whether to place Member States under the excessive deficit procedure.
In relation to the convergence criteria, the report’s main conclusions are that:
- Bulgaria meets the public finances, long-term interest rates and exchange rate criteria, but not the price stability criterion;
- Czechia meets the public finances and long-term interest rates criteria, but not the price stability or exchange rate criteria;
- Croatia meets all four convergence criteria;
- Hungary meets the public finances criterion, but not the price stability, exchange rate or long-term interest rates criteria;
- Poland meets the public finances criterion, but not the price stability, exchange rate or long-term interest rates criteria;
- Romania meets none of the four convergence criteria;
- Sweden meets the price stability, public finances and long-term interest rates criteria, but not the exchange rate criterion.
Of the seven Member States assessed, only legislation in Croatia is considered fully compatible with the EU treaties under Article 131 TFEU.
The 2022 ECB convergence report makes the following points:
- The COVID-19 crisis led to a significant drop in economic activity in 2020, from which all Member States under review rebounded strongly.
- The Russian invasion of Ukraine in February 2022 has weighed on growth, and inflation has increased in all the Member States assessed. The economic repercussions of the war will vary across the Member States under review and it is therefore too early to draw any firm conclusions about how the convergence paths will be affected.
- The report makes a positive assessment of Croatia in an in-depth review, with the Croatian authorities having announced their intention to adopt the euro from .
BACKGROUND
For further information, see:
- Convergence reports (European Commission)
- Convergence reports (European Central Bank)
- Convergence criteria for joining (European Commission)
- Convergence criteria (European Central Bank).
MAIN DOCUMENT
Report from the Commission to the European Parliament and the Council – Convergence report 2022 (prepared in accordance with Article 140(1) of the Treaty on the Functioning of the European Union) (COM(2022) 280 final, ).
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