The European Central Bank concluded in its 2026 Convergence Report that none of the five European Union member states outside the euro area are currently ready to adopt the single currency. The ECB assessed the Czech Republic, Hungary, Poland, Romania and Sweden against legal and economic criteria required for joining the euro, finding that inflation, fiscal deficits, interest rates and legal shortcomings continue to prevent accession. Published every two years, the report notes that while all five economies have remained resilient despite external shocks, progress since the previous assessment in 2024 has been limited. The findings arrive as Russia's war against Ukraine continues to affect regional economies and conflict in the Middle East has increased volatility in energy markets. None of the five countries currently satisfies all of the Maastricht convergence criteria, meaning the euro area will remain unchanged for the foreseeable future.
Czech Republic and Sweden Meet Inflation Criterion While Three Countries Exceed Thresholds
The Czech Republic and Sweden both recorded average inflation below the ECB's reference value of 2.7%. Hungary, Poland and Romania all exceeded that threshold, with Romania recording the highest inflation among the countries under review.
Hungary, Poland and Romania continue to run fiscal deficits above the Maastricht limit of 3% of GDP, while long-term borrowing costs remain elevated in those same three countries. None of the five participates in the Exchange Rate Mechanism II, the mandatory waiting room that countries must enter before adopting the euro. Without joining ERM II, euro adoption cannot proceed regardless of performance on other economic indicators.
The report concludes that legislation in all five countries remains incompatible with the legal framework governing the euro area. National laws relating to central bank independence and integration into the Eurosystem must be amended before accession can take place.
Romania, Hungary and Poland Exceeded 3% Deficit Ceiling During 2025
According to the report, Hungary, Poland and Romania all exceeded the EU's 3% deficit ceiling during 2025. Romania remains subject to an Excessive Deficit Procedure first opened in 2020, while Hungary and Poland joined the procedure during 2024.
The European Commission does not expect any of the three countries to reduce their deficits below the required threshold before the end of 2027. Romania faces a correction deadline of 2030, Hungary 2026, and Poland 2028.
While Hungary already exceeds the Maastricht debt ceiling of 60% of GDP, the European Commission projects both Poland and Romania will cross that threshold during 2026 if current trends continue. The ECB's reference value for long-term interest rates stands at 5.1%, yet Poland averaged 5.4%, while both Hungary and Romania averaged 6.7%.
Two of five countries meet the inflation requirement, two of five meet the fiscal deficit requirement, two of five meet the long-term interest rate requirement, zero of five participate in ERM II, and zero of five have legal compatibility.
Sweden Declined ERM II Entry Following 2003 Referendum
Sweden maintains some of Europe's strongest public finances and performs well against most convergence indicators. Successive Swedish governments have declined to join ERM II following the country's 2003 referendum rejecting euro adoption.
The Czech Republic has not sought entry into ERM II, effectively postponing accession indefinitely. Hungary and Poland have shown limited political appetite for adopting the euro in recent years, while Romania remains the only country that continues to publicly support eventual accession despite still facing the largest convergence gaps.
The report highlights institutional quality as an increasingly important determinant of sustainable convergence. With the exception of Sweden, the ECB says there remains room for improvement in governance and institutional effectiveness, particularly in Hungary and Romania.
FAQ
Which EU countries did the ECB assess in its 2026 Convergence Report?
The ECB assessed the Czech Republic, Hungary, Poland, Romania and Sweden in its 2026 Convergence Report. These five countries are the remaining EU member states outside the euro area.
How many of the five countries participate in the Exchange Rate Mechanism II?
None of the five countries participate in the Exchange Rate Mechanism II. Without joining ERM II, euro adoption cannot proceed regardless of performance on other economic indicators.
What fiscal deficit threshold did Hungary, Poland and Romania exceed during 2025?
Hungary, Poland and Romania all exceeded the EU's 3% deficit ceiling during 2025. Romania remains subject to an Excessive Deficit Procedure first opened in 2020, while Hungary and Poland joined the procedure during 2024.
