<P> Full EMU membership is only open to EU member states . However, the European microstates of Andorra, Monaco, San Marino and the Vatican City, which due to their small size are not members of the EU, have signed monetary agreements with EU which allow them officially to adopt the euro and issue their own variant of euro coins . These states had all previously used one of the eurozone currencies replaced by the euro, or a currency pegged to one of them . These states are not members of the eurozone and do not get a seat in the European Central Bank (ECB) or the Eurogroup . </P> <P> As part of the EU treaty, all of the EU Member States are obliged to adhere to the Stability and Growth Pact (SGP), which serves as a framework to ensure price stability and fiscal responsibility, has adopted identical limits for governments budget deficit and debt as the convergence criteria . Due to the fact that several countries did not exercise a sufficient level of fiscal responsibility during the first 10 years of the euro's lifetime, two major SGP reforms were recently introduced . The first reform was the Sixpack which entered into force in December 2011, and it was followed in January 2013 by the even more ambitious Fiscal Compact, which was signed by 25 out of the then - 27 EU member states . </P> <P> The Maastricht Treaty, which was signed in February 1992 and entered into force on 1 November 1993, outlined the 5 convergence criteria EU member states are required to comply with to adopt the new currency the euro . The purpose of setting the criteria was to achieve price stability within the eurozone and ensure it wasn't negatively impacted when new member states accede . The framework of the five criteria was outlined by article 109j. 1 of the Maastricht Treaty, and the attached Protocol on the Convergence Criteria and Protocol on the Excessive Deficit Procedure . The original treaty article was later renumbered to become article 121.1 of the Amsterdam Treaty, and later renumbered again to Article 140 of the Treaty on the Functioning of the European Union . Aside from the renumbering, no significant change have happened to the content of the "convergence criteria article" and its referred to Protocol on the Convergence Criteria and Protocol on the Excessive Deficit Procedure . The precise definition and method of measuring compliance was subsequently further developed by the EMI (later known as ECB) in their first three reports published in April 1995, November 1995 and November 1996 . The full definition of the five criteria are summarised below . </P> <Ol> <Li> HICP inflation (12 - months average of yearly rates): Shall not exceed the HICP reference value, which is calculated by the end of the last month with available data as the unweighted arithmetic average of the similar HICP inflation rates in the 3 EU member states with the lowest HICP inflation plus 1.5 percentage points . However, EU member states with a HICP rate significantly below the eurozone average (and pre 1999 below "comparable rates in other Member States"), do not qualify as a benchmark country for the reference value and will be ignored, if it can be established its price developments have been strongly affected by exceptional factors (i.e. severe enforced wage cuts, exceptional developments in energy / food / currency markets, or a strong recession). In example, at the April 2014 assessment: Greece, Bulgaria and Cyprus with HICP values respectively 2.2, 1.8 and 1.4 percentage points below the eurozone average, were all found to have suffered from exceptional factors, and hence concluded to be outliers, causing the reference limit instead to be calculated based on the HICP values from the three states with the 4th to 6th lowest HICP values in EU . </Li> <Li> Government budget deficit: The ratio of the annual general government deficit relative to gross domestic product (GDP) at market prices, must not exceed 3% at the end of the preceding fiscal year (based on notified measured data) and neither for any of the two subsequent years (based on the European Commission's published forecast data). Deficits being "slightly above the limit" (previously outlined by the evaluation practice to mean deficits in the range from 3.0--3.5%), will as a standard rule not be accepted, unless it can be established that either: "1) The deficit ratio has declined substantially and continuously before reaching the level close to the 3% limit" or "2) The small deficit ratio excess above the 3% limit has been caused by exceptional circumstances and has a temporary nature (i.e. expenditure one - offs triggered by a significant economic downturn, or expenditure one - offs triggered by the implementation of economic reforms with a positive mid / long - term effect)". If a state is found by the Commission to have breached the deficit criteria, they will recommend the Council of the European Union to open up a deficit - breached EDP against the state in accordance with Article 126 (6), which only will be abrogated again when the state simultaneously comply with both the deficit and debt criteria . </Li> <Li> Government debt - to - GDP ratio: The ratio of gross government debt (measured at its nominal value outstanding at the end of the year, and consolidated between and within the sectors of general government) relative to GDP at market prices, must not exceed 60% at the end of the preceding fiscal year . Or if the debt - to - GDP ratio exceeds the 60% limit, the ratio shall at least be found to have "sufficiently diminished and must be approaching the reference value at a satisfactory pace". This "satisfactory pace" was defined and operationalized by a specific calculation formula, with the entry into force of the new debt reduction benchmark rule in December 2011, requiring the states in breach of the 60% limit to deliver--either for the backward - or forward - looking 3 - year period--an annual debt - to - GDP ratio reduction of at least 5% of the part of the benchmark value being in excess of the 60% limit . If both the 60% limit and "debt reduction benchmark rule" is breached, the Commission will finally check if the breach has been caused only by certain special exempted causes (i.e. capital payments to establishment of common financial stability mechanisms, like the ESM)--because if this is the case they will then rule an "exempted compliance". If a state is found by the Commission to have breached the debt criteria (without this breach solely being due to "exempted causes"), they will recommend the Council of the European Union to open up a debt - breached EDP against the state in accordance with Article 126 (6), which only will be abrogated again when the state simultaneously comply with both the deficit and debt criteria . </Li> <Li> Exchange rate stability: Applicant countries should not have devalued the central rate of their euro pegged currency during the previous two years, and for the same period the currency stability shall be deemed to have been stable without "severe tensions". As a third requirement, participation in the exchange - rate mechanism (ERM / ERM II) under the European Monetary System (EMS) for two consecutive years is expected, though according to the Commission "exchange rate stability during a period of non-participation before entering ERM II can be taken into account ." For example, Italy was deemed to have converged with only 15 months as an ERM - member, as measured on the last day in the review period of the convergence report . Meanwhile, the European Commission concluded that for Cyprus, Malta and Latvia, their 18 months of membership in the review period ending on 31 October 2006 was insufficient . As of 2014, all 29 times the subcriteria for ERM - membership length was found complied with by the Commission, these cases had the particular observation in common, that the state had surpassed minimum two full years of ERM - membership either ahead of the "final approval date (following approximately 1.5 month after the publication of the convergence report) where their currency exchange rate would be irrevocably fixed by the Council of the European Union" or by the "first possible euro adoption date following the publication of the convergence report". </Li> <Li> Long - term interest rates (average yields for 10yr government bonds in the past year): Shall be no more than 2.0 percentage points higher, than the unweighted arithmetic average of the similar 10 - year government bond yields in the 3 EU member states with the lowest HICP inflation (having qualified as benchmark countries for the calculation of the HICP reference value). If any of the 3 EU member states in concern are suffering from interest rates significantly higher than the "GDP - weighted eurozone average interest rate", and at the same time by the end of the assessment period have no complete funding access to the financial lending markets (which will be the case for as long as a country is unable to issue new government bonds with 10 - year maturity--instead being dependent on disbursements from a sovereign state bailout programme), then such a country will not qualify as a benchmark country for the reference value; which then only will be calculated upon data from fewer than 3 EU member states . In example, Ireland was found to be an interest rate outlier not qualifying for the reference value calculation in the assessment month March 2012, when it was measured to have a long - term interest rate average being 4.71 percentage points above the eurozone average--while at the same time having no complete access to the financial lending markets . When Ireland was assessed again in April 2013, it was, however, deemed no longer to be an outlier, due to posting a long - term interest rate average only 1.59 percentage points above the eurozone average--while also having regained complete access to the financial lending markets for the last 1.5 month of the assessment period . A final relevant example appeared in April 2014, when Portugal likewise was found not to be an interest rate outlier, due to posting a long - term interest rate average being 2.89 percentage points above the eurozone average--while having regained complete access to the financial lending markets for the last 12 months of the assessment period . </Li> </Ol>

Which of the following is a criterion to join a single currency in the eu