The criteria include the ERM II
requirement and reference rates for inflation, budget deficits, debt to GDP ratios and long-term interest rates.
To adopt the euro, they still have to participate in ERM II
for at least 2 yr before a convergence assessment for EMU membership can be made.
The Convention for the ERM II
(September 1st, 1998) states that each euro candidate will have to define a central rate against the euro together with a standard fluctuation band of [+ or -]15% (a narrower band may be negotiated on a bilateral basis).
Thus, the economic environment might not only influence the timing of entry and the duration of participation in the ERM II
but also the broader issue of fast or slow entry.
The acceding countries should therefore give careful consideration to the timing of their ERM II
As a part of the accession procedure to the euro zone, the ERM II
is mandatory for every candidate for the euro adoption.
In the "Joint Program of the Slovenian Government and the Bank of Slovenia for the ERM II
Entry and the Euro Adoption" (henceforth Joint Program) are presented and motivated the key elements for the euro adoption strategy.
Bulgaria is also expected to join ERM II
shortly after enlargement as it fulfills most of the convergence criteria.
Bulgariaas Finance Minister did not specify concrete dates for entry into the ERM II
and the subsequent adoption of the euro as the official currency.
Based on an evaluation of 19 December 2007, it was decided that the Czech Republic should not integrate into ERM II
(the European Exchange Rate Mechanism, a prerequisite to eurozone accession) in 2008.
What is more important, however, is that the Polish exchange rate regime evolved towards a free float system, which is considered by the EU authorities as incompatible with the principles underlying the ERM II
[ECB, 2003; EC, 2004a].
The Maastricht criteria require accession countries to stay in ERM II
for at least 2 years and meet the inflation criterion simultaneously.