The Eurozone was created in 1999 with countries including Austria, Belgium, France, Germany, and Ireland. New participant countries have joined since—Slovenia

(2007), Cyprus (2008), Malta (2008), Slovakia (2009), Estonia (2011), Latvia

(2014), and Lithuania (2015). To become a member of the European Monetary Union, the candidate country has to first participate in a “testing phase,” known as the Exchange rate mechanism (ERMII), which lasts for two years; the country also needs to fulfill certain “convergence criteria” like inflation, debt, and exchange rate stability. The central exchange rate chosen between the candidate currency and the euro is based on a range of economic indicators.

Comment on this procedure and discuss, according to what is said in this chapter, why the PPP appreciation is not included in the process?