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The economic and monetary union

Convergence criteria

The convergence criteria which are used to establish whether a country is eligible to join EMU were laid down in Article 121(1) of the EC Treaty and subsequently elaborated in Protocol 21 annexed to the EC Treaty. The ECB later defined the way in which it applies the criteria.
The definitions include:
a) price stability: in the twelve months preceding the assessment, the average inflation rate must not exceed by more than 1.5% the average rate of the three Member States with the lowest inflation rates;
b) sustainability of public finances: the government deficit must not exceed 3% of GDP and the government debt must not exceed 60% of GDP, unless they are declining substantially and continuously;
c) exchange rate stability: the exchange rate of the respective currency must respect, for at least two years, the normal fluctuation margins provided for by ERM II without devaluing against the currency of any other Member State;
d) convergence of long-term interest rates: the average nominal long-term interest rate (on government bonds or comparable securities) observed over the year preceding the examination must not exceed by more than 2 percentage points the average rate of the three Member States with the lowest inflation rates.