Overview (1999–2005)

One of the most daunting, but most important, parts of the acquis communautaire that the accession countries must agree to take on is the replacement of their national currencies with the common currency of the European Union, the euro. As of 2003, however, only twelve of the fifteen member states had actually adopted the euro as their common currency. The other three – the United Kingdom, Denmark, and Sweden – have opted out for the time being, although each has reserved the possibility of joining eventually. Denmark held a referendum on the issue in 2002, in which the Danish voters cast a negative vote, by a narrow margin, against adopting the euro. Denmark, nevertheless, remains a member of the European Monetary System (EMS), meaning that its monetary authorities are committed to maintaining a virtually fixed exchange rate with the euro. Sweden held a referendum on the issue on September 6, 2003, in which voters narrowly decided against joining the eurozone. The British government had announced earlier, in June 2003, that it still did not feel the economic conditions were right for it to join either the eurozone or the EMS.

The issue confronting each of the ten new accession countries over the next few years, then, is when they should join the common currency and tie their monetary policy to that of the European Central Bank.