Financial and monetary integration in the new Europe. Convergence between the EU and Central and Eastern Europe

Book abstract:

This book examines the challenges for Central and Eastern European countries that wish to join the European Union but need to achieve financial convergence with the existing EU countries. The book finds that whilst the transition countries have made the necessary transformations to market economies and experienced economic growth there is still some institution building required and policy issues to be resolved.

The book is divided into two parts concentrating on Latvia, Lithuania, Poland, Bulgaria and the Czech Republic. Part 1, 'Monetary and Exchange Rate Policy', has chapters including: The Czech Approach to Inflation Targeting; Latvia on the Way to the European Union - Economic Policy Convergence; The Currency Board Regime in Bulgaria and its Sustainability; EMU Convergence Criteria and International Flows of Capital - the Dilemmas for Polish Macroeconomic Policy; and Joining EMU as an Irreversible Investment. These chapters discuss three main areas: the conduct of monetary policy within the CEE economies and current developments; the future path of monetary policy, particularly with regard to choice of exchange rate regime; and the decision that CEE countries will face as to whether to adopt the Euro. Part 1 concludes that a problem with monetary policy operation is the impact of financial sector development.

Part 2, 'Financial Sector Investment', examines the developments that are taking place and their effects on the financial systems of CEE economies as they converge with the EU. It has chapters including: Financial Stability and Economic Development in Transitional Economies; Mobilisation of Savings in Transition Countries - the Case of Lithuania; The Polish Banking Sector and EU Regulations; Market Efficiency in Transition Economies - Equity Markets and EU Accession; and Convergence between the Financial Systems of EU Member States and Applicant Transition Economies. The book emphasises that for CEE countries to develop the more efficient financial sectors required for convergence, they must develop a regulatory and supervisory structure to ensure financial stability and effective corporate governance, while promoting competition.

The individual chapters are authored by a range of European academics. It is aimed at the academic community.