The Maastricht convergence criteria
During Stage 2 of Economic and Monetary Union (1 January 1994 - 31 December 1998), a major effort is made to achieve convergence between the economies of the Member States. Four measurement criteria are laid down in the Maastricht Treaty, in December 1991.
- Low inflation. The average inflation rate observed during a one-year period before a country is examined for admission to the single currency must not be more than 1.5% higher than the average of the three best performing Member States in terms of price stability.
- Sound public finances. The government deficit must not exceed 3% of gross domestic product (GDP) and the public debt must not exceed 60 % of GDP, unless the ratio is sufficiently diminishing and approaching the reference value at a satisfactory pace. This latter criterion is therefore more flexible with greater scope for discretion.
- Stable exchange rates. Candidate countries must have observed the normal fluctuation margins provided for by the exchange rate mechanism of the European Monetary System for at least two years, without devaluing their currency against that of any other Member State.
- Low interest rates. During the year preceding the examination, the average long-term interest rate must not be more than 2% above that of the three best performing Member States in terms of price stability.