Hard currency and sound credit: A financial agenda for Central Europe

A prize-winning essay in a competition organized by the European Investment Bank. The authors ask what Hungary, Poland or the Czech Reublic have to lose in giving up their monetary sovereignty through the establishment of currency boards. They argue that, despite the limitations of rigidity, substantial cost and loss of sovereignty, currency boards reduce the risk premium on public debt and enhance a country's international standing by providing transparent institutions. The authors conclude that, despite transition difficulties, the EU's historic move to a single currency offers Central Europe a unique opportunity for change.

http://www.eib.org/attachments/efs/eibpapers/eibpapers_1999_v04_n02_en.pdf http://www.eib.org/attachments/efs/eibpapers/eibpapers_1999_v04_n02_en.pdf

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