European Economy. Convergence Report 2011 3/2012

Abstract

Article 140(1) of the Treaty on the Functioning of the European Union (hereafter TFEU) requires the Commission and the ECB to report to the Council, at least once every two years, or at the request of a Member State with a derogation1, on the progress made by the Member States in fulfilling their obligations regarding the achievement of economic and monetary union. The latest Commission and ECB Convergence Reports were adopted in May 2010. The 2012 Convergence Report covers the following eight Member States with a derogation: Bulgaria, the Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden2. A more detailed assessment of the state of convergence in these Member States is provided in a Technical Annex to this report (SWD(2012) 144). At the time of the last Convergence Report in 2010, Member States had shown uneven progress with convergence, as many of them were undergoing significant adjustments of previously accumulated imbalances, against the background of the economic and financial crisis. The present examination takes place in a still difficult external environment, with a fragile recovery in the region and recurrent headwinds on financial markets.