European Commission: Strategy Paper and Report 2003

EMU and the Euro

In accordance with the EU Treaty, new Member States cannot immediately adopt the Euro upon accession. However, as for all Member States, economic policies become a matter of common concern and hence are subject to policy co-ordination and multilateral surveillance procedures. The main instruments for co-ordination are the Broad Economic Policy Guidelines, the Stability and Growth Pact and a number of processes which deal with specific policy areas. The exchange rate policy becomes a matter of common interest. Participation in the Exchange Rate Mechanism II is expected some time after accession.

Participation in the euro area is the ultimate goal of new Member States. They will integrate, at that moment, into the single, stability-oriented monetary policy and the single exchange rate policy, in addition to the full application of the economic policy co-ordination and surveillance procedures. Until that time, the Treaty obliges Member States to pursue the high degree of sustainable convergence required for the adoption of the euro, but does not specify the timetable to attain this. Its attainment will depend on the economic characteristics of each country and its success in applying the policies geared to sustainable convergence.