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Anchor, float or abandon ship: exchange rate regimes for the accession countries
- Source :
- PSL Quarterly Review, Vol 55, Iss 221 (2012)
- Publication Year :
- 2012
- Publisher :
- Associazione Economia civile, 2012.
-
Abstract
- The paper considers alternative exchange rate regimes for the East European accession candidates, both prior to EU accession and following EU accession but prior to EMU membership. We conclude that, from an economic point of view, EMU membership should be as early as possible. There is, however, a risk that prevailing interpretations of the inflation and exchange rate criteria for EMU membership could lead to unnecessary delays in EMU membership for the accession countries. The exchange rate criterion for EMU membership requires that the candidate "has respected the normal fluctuation margins provided for by the exchange ratemechanism of the European Monetary System without severe tensions for at least the last two yeas before the examination." Both this text and the precedents of Finland, Italy and Greece, support the view that the exchange rate criterion can be satisfied without two years of formal ERMII membership. Insistence on at least two years of formal ERMII membership for the accession countries, would result in an unnecessary, costly and potentially risky stay in EMU purgatory. JEL Codes: F33, P33
- Subjects :
- EMU
Exchange Rates
Political science
Economic theory. Demography
HB1-3840
Subjects
Details
- Language :
- English
- ISSN :
- 20373643 and 20373635
- Volume :
- 55
- Issue :
- 221
- Database :
- Directory of Open Access Journals
- Journal :
- PSL Quarterly Review
- Publication Type :
- Academic Journal
- Accession number :
- edsdoj.94dd8a6973164ff2a2cc5d24ebd69b4a
- Document Type :
- article
- Full Text :
- https://doi.org/10.13133/2037-3643/9906