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1. Deficits: National government deficits must be less than 3% of GDP2. Public Debt: Government debts must be less than 60% of GDP3. Interest/Price Stability: Long-term interest rates on debt must be within 2% of average in the top 3 EU member countries with best inflation record4. Inflation: Annual inflation rate cannot exceed average of top 3 performing EU countries by more than 1.5% during year prior to Euro zone assessment.5. Exchange Rate: Must remain within normal fluctuation margins (15% around fixed parity with the euro) for the last 2 years before assessment.-Stability and Growth Pact - Can create penalties for over deficit-Must be part of European Exchange Rate Mechanism (ERM) for 2 years prior to becoming member of Euro zone. Countries manage own exchange rates until excepted into Euro zone.