For joining the euro zone, Croatia fulfils all criteria but one, which is entering the Exchange Rate Mechanism (ERM II) for at least two years, sad the European Commission's convergence report published on Wednesday for the countries obliged to introduce the euro.

The report included seven countries which, upon joining the EU, have taken on the obligation of introducing the euro as official currency: Bulgaria, The Czech Republic, Croatia, Hungary, Poland, Romania, and Sweden. The report said the countries in general showed high nominal convergence, but none of them fulfilled all the formal criteria for joining the euro zone. Two countries, Croatia and Bulgaria, fulfil all the convergence criteria apart from taking part in ERM II, said a press release from the European Commission.

Convergence criteria include price stability, orderly public finances, exchange rate stability, and long-term interest rates convergence.

ERM II is a system which ensures that exchange rate fluctuations between the euro and other EU currencies do not disrupt economic stability within the single market, and helps countries outside the euro zone prepare themselves for participation in the euro area.

Only Croatia, of the countries included in the report, has brought its legislation completely in line with the regulations set by the European Monetary Union, the release said.

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