Determinants and implications of the Eurozone enlargement

Aside from the United Kingdom, which is withdrawing from the European Union, only Denmark has the option of staying outside the single European currency area. All other member states which have not adopted euro as their currency have the right and obligations to do so under the Treaty of Accession. The condition to join the Eurozone is to meet all five nominal Maastricht convergence criteria and to ensure compliance of national legislation with acquis communautaire, or the EU legal order. What poses special difficulties to candidate countries is the fiscal criterion relating to the maximum allowed budget deficit. If it’s not met, the European Commission launches the Excessive Deficit Procedure, EDP. Currently, this procedure is in place for France, Spain and the United Kingdom. In 2015, EDP for Poland was lifted, but there is no certainty it won’t be imposed again at the end of the decade due to the risk of exceeding once more the threshold of public sector deficit, which stands at 3 percent GDP. It is to be expected that in the 2020s the European Monetary Union will be joined by all the countries that are still using their national currencies, including Denmark, and that the EU will be extended to include new member states, enlarging the euro area, too. Although the issue is not absolutely certain, it needs to be assumed that euro will overcome the present difficulties and come out stronger, though the economically unjustified euroskepticism of some countries, especially Poland, is not helping.