There are 27 countries in the EU, and only 19 in the Eurozone. Bulgaria, Denmark, the Czech Republic, Hungary, Poland, Romania and Sweden have not introduced the euro. At a low start in the “eurozone waiting room” waiting to replace their national currencies with the single European one are Croatia and our country. Zagreb will adopt the euro from January 1, 2023, despite Croatia being the last country to join the European Union. and Bulgaria is aiming for January 1, 2024, but there are still disputes as to whether and when.
There are also countries that sat in the waiting room for a long time. For example, Lithuania – 10 years, and Estonia – six and a half years, but in the end they introduced the euro. And there is a third category, which have accepted to be members of the Community, but have categorically announced that they will not work with the euro, but with their national currencies.
In the history of the EU, Denmark is the only exception so far to the general rule that the members of the Community sooner or later adopt the single European currency. It entered the EU way back in 1973, but arranged a special clause in its treaty for non-participation in the eurozone and continued to operate with the Danish krone. Formally, however, according to documents, Copenhagen has been in the waiting room of the euro for 23 years, although it has no intention of leaving it.
The reason the Danes keep the krone is their belief that with the introduction of the euro, their country risks its national independence in terms of monetary policy. This independence is controversial because, although outside the Eurozone, Denmark can only theoretically set its own monetary policy.
The Danish krone has been pegged to the German mark since 1982. After the mark was replaced by the euro, the Danish central bank joined the European Monetary Mechanism (ERM II) or so-called. waiting room of the Eurozone. This system binds Denmark to euro policy, but without allowing it any control over the decision-making of that policy.
As the country is part of the waiting room of the eurozone, the Danish central bank is forced to follow strict policies to maintain the exchange rate of the Danish krone to the euro. And the monetary policies that Denmark implements are largely dictated by the Eurozone.
Like the Bulgarian lev, the Danish currency has a fixed exchange rate to the euro. 1 euro equals 7,460 Danish kroner, and any deviation below or above 2.25% leads to intervention by the Danish central bank.
To change the situation with the denial of the euro, the Danish government should hold a special referendum on the introduction of the euro. And such have been done more than once. The last one was in 2000, when a large number of Danes again said “no” to the currency.
The situation was the same with Great Britain. During her entire 47-year stay in the EU, she never wanted to introduce the euro.
Viktor Orbán’s deal
Hungarian Prime Minister Viktor Orbán has been an outspoken opponent of the single European currency. Back in 2018, he stated that “the country should be cautious and be open to other parts of the world.” And, in general, the position of the Hungarian governments has always been like this, but not so diplomatically stated. In the last year, however, Hungary has experienced many upheavals. The Hungarian forint collapses, and with it the entire economy. And that’s the least of the problems. Hungary is on track to run out of €37bn worth of EU funding due to rule of law issues. Just then, Hungary’s finance minister hinted that the country could seek to join the eurozone’s waiting room this year or next, but only if it can reach a deal by the end of the year to unblock EU funds.
Romania postpones for the fourth time
Romania will postpone the transition to the euro until 2029, the National Bank officially announced.
Romania, which joined the EU along with Bulgaria in 2007, originally aimed to adopt the euro in 2014, but the deadline has been revised several times. Entry into the Eurozone was postponed to 2019, then to 2024, and now there will apparently be another 5-year delay.
Romania had a “bright period” between 2015 and 2017 when it could apply to join the eurozone’s ERM II preparatory mechanism and met all the nominal convergence criteria set out in the Maastricht Treaty. Unfortunately, in At the moment, our neighbor does not meet all the criteria, which was clearly stated by the EC.
The future remains unclear. The convergence program for the period 2022-2025, adopted by the government and sent to the European Commission, does not indicate a specific date for the introduction of the common European currency.