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Eleven EU Member States (Bulgaria, the Czech Republic, Denmark, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Sweden, UK) have not introduced the euro.
With the exception of Denmark and the UK, both of which have a derogation, the other Member States are obliged to introduce the euro in the course of time according to the EU Treaty. To be able to participate in the euro, Member States have to fullfill the convergence criteria, including the criterion on participation in EU's exchange-rate mechanism, ERM II, without severe tensions for at least two years. In Denmark, Sweden and the UK participation in the euro are to be endorsed by referendum.
The Danish krone is closely linked to the euro via ERM II. Due to its high degree of convergence, Denmark has entered into an agreement with ECB on a narrower fluctuation band of +/- 2,25 pct. Estonia, Latvia and Lithuania also participate in ERM II with the standard fluctuation band of +/- 15 pct. Bulgaria has a currency board, which is a form of fixed exchange rate regime, while the other Member States maintain an inflation targeting framework. In the majority of these countries the exchange rate is freely floating, but in some countries the exchange rate is to some degree managed .
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