EditCzechia leads in Euro convergence, but government has no desire to join
The Czech Republic has successfully met three of the four key economic criteria, positioning it ahead of its peers, while Romania hasn't met any
The European Commission’s 2026 convergence report, published on 24 June, underscores meaningful differences in progress toward euro adoption among the five EU member states still legally obligated to join the euro area.
The Czech Republic has successfully met three of the four key economic criteria, positioning it ahead of its peers, while Romania hasn’t met any. This contrast illustrates the uneven pace of convergence across Central and Eastern Europe as the eurozone continues to expand.
More than 27 years after its launch, the euro serves as a powerful symbol of European identity and integration. It is now the currency of 21 member states and is used daily by over 350 million people, making it the second most widely used currency globally. The single currency has delivered tangible benefits by strengthening the single market, facilitating smoother trade and investment, and supporting price stability. The last to join the Eurozone were Bulgaria on 1 January 2026 and Croatia in 2023. For aspiring members, meeting the strict Maastricht criteria remains essential to ensure sustainable participation.
Czech Republic demonstrates solid economic convergence
The Czech Republic stands out in the latest ECB Convergence Report for meeting the criteria on price stability, sound public finances, and the convergence of long-term interest rates. This reflects effective macroeconomic policies that have kept inflation close to the reference value, maintained fiscal discipline with controlled public deficits, and aligned long-term borrowing costs with euro area levels. Such progress demonstrates a solid economic foundation and strong investor confidence in the country’s fiscal management.
Nevertheless, the Czech Republic does not yet fulfil the exchange-rate stability criterion. It has not joined the Exchange Rate Mechanism II (ERM II), which requires at least two years of participation without severe currency tensions. In addition, Czech national legislation remains incompletely compatible with the EU Treaties and the Statute of the European Central Bank, particularly regarding central bank independence and full integration into the Eurosystem. As a result, euro adoption is not currently possible, despite the country’s legal obligation under its 2004 EU Accession Treaty – a commitment confirmed by Czech citizens in a referendum.
Prime Minister Andrej Babiš stated in May that the government would stop preparing reports on euro readiness, arguing that such exercises are pointless given the cabinet’s lack of desire to introduce the common currency. This political stance contrasts with the technical headway noted by the Commission but highlights how domestic priorities influence the timeline. None of the five countries under review – Czech Republic, Hungary, Poland, Romania, and Sweden, currently participates in ERM II, a critical step that remains unfulfilled across the board.
Romania faces significant challenges across all criteria
In contrast to the Czech Republic’s stronger performance, Romania meets none of the convergence criteria, revealing deeper structural and fiscal hurdles. Its average inflation rate through May stood at 8.4 percent, far exceeding the reference value of 2.7 percent. While inflation is projected to ease gradually in the second half of 2026 and into 2027, it is expected to remain above the threshold, delaying price stability. The National Bank of Romania has used a crawl-like exchange rate arrangement with interventions to maintain financial stability and anchor expectations, but the leu still depreciated notably against the euro amid 2025’s political uncertainty and capital outflows, ending around 5 percent weaker over two years.
Public finances represent another major shortfall. Romania remains subject to an excessive deficit procedure, with the general government deficit improving from 9.3 percent of GDP in 2024 to 7.9 percent in 2025 due to enhanced tax collection and two substantial fiscal consolidation packages. These measures delivered roughly 3.7 percentage points of GDP in combined revenue gains and spending cuts. Projections show the deficit declining further to 6.2 percent in 2026 and 5.8 percent in 2027, supported by higher VAT and excise duties, dividend and property tax adjustments, and tighter expenditure controls. Still, these figures continue to exceed the 3 percent Treaty reference value significantly.
Long-term interest rates also fail the convergence test, averaging 6.7 percent through May against a 5.1 percent reference. Rates rose amid fiscal concerns and market risk aversion before partially stabilizing in early 2026. Legal convergence lags as well, with Romania’s central bank statute containing incompatibilities related to independence, the prohibition of monetary financing, and full integration into the Eurosystem.
Sweden joins the Czech Republic in meeting three criteria, while Hungary and Poland show more limited alignment. The report emphasizes that genuine and sustained convergence across all areas is necessary before any country can safely adopt the euro.
Following Sweden’s accession to NATO in 2024, its long-standing neutrality is coming to an end. Economists and policymakers believe that adopting the euro would enhance Sweden’s integration and influence amid global turbulence.
The European Central Bank notes that while Sweden meets many legal and fiscal criteria, such as price stability and strong public finances, it remains outside the ERM II exchange rate mechanism, which is a key step toward euro adoption.
Public attitudes, however, remain largely positive despite these technical obstacles. The accompanying Flash Eurobarometer survey, conducted from 17 April to 4 May, 2026, found that 57 percent of respondents in the non-eurozone states believe the euro has positively impacted existing members. Majorities also expect benefits for their own country (51 percent) and personally (52 percent). Overall, 52 percent support introducing the euro domestically, with the strongest backing in Hungary (80 percent, up notably year-on-year), Romania (65 percent), Sweden (51 percent), Poland (43 percent), and the Czech Republic (42 percent). These attitudes suggest most citizens see the euro as a route to greater prosperity even where governments move cautiously.
Outside the EU, the euro’s reach extends unofficially. Montenegro and Kosovo have used it as their primary currency for 23 years despite not being EU or eurozone members. Montenegro, independent from Serbia since 2006 and in EU accession talks since 2012, aims to join the Union by 2028. Kosovo, independent since 2008, applied for membership in late 2022, but its candidacy remains stalled due to non-recognition by five EU countries: Cyprus, Greece, Romania, Slovakia, and Spain.
The euro’s introduction began with physical notes and coins on 1 January 2002, in twelve founding nations. Today, its proven resilience reinforces the advantages of membership for well-prepared countries.
Sources: Partner media Espress.ro and Update-eu.cz
Romania’s path to the Eurozone: optimism meets fiscal reality
Caption: An exterior view of European Central Bank (ECB) before a press conference following the meeting of the ECB Governing Council in Frankfurt am Main, Germany, 30 April 2026. EPA/RONALD WITTEK
Updated: June 25, 2026 - 11:17
