The Euroarea and the new EU Member States

Abstract:

This book deals with the commitment made by most of the new Member States to enter into the Common European Currency Area - the Euroarea. The contributions are organised in two parts ranging over ten chapters. Part one discusses general policy issues for the accession countries. Part two consists of country-specific monetary policy and exchange rate questions in the run-up to monetary union. The countries covered are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia.

Chapter one presents the general EU framework for Euroarea accession for the future Member States together with an evaluation of the Euroarea itself. The Optimum Currency Area is the focus of chapter two, which analyses in detail the issues related to participation in EMU by the accession countries (ACs). Chapter three presents a model to guide the ACs through the different exchange rate regimes, while chapter four attempts macroeconomic policy analysis by use of a similar model to simulate the effects of integration of ACs with the EU. Chapter five argues that the choice of the foreign exchange rate regime is not of first order importance for achieving high output growth.

Chapter six opens part two with a comprehensive history of monetary policy in Slovenia and the choices facing the country on the eve of accession. Estonia is the focus of chapter seven. Chapter eight details the preparation made by the Czech Republic's National Bank and the degree to which there is already a substantial dependence on Euroarea monetary decisions. Poland's choice of the exchange rate parity on entry to EMU is addressed in chapter nine. A history of the monetary framework of Hungary and the important policy choices to be made upon accession are featured in chapter ten.

The work will interest scholars, students, researchers and policy makers engaged in the fields of European studies, European integration, economics and international monetary systems.

Lúcio Vinhas de Souza is an economist at the Kiel Institute for World Economics, Germany, and a member of the committee of the University Association of Contemporary European Studies (UACES). Bas van Aarle is a postdoctoral researcher for the FWO (Fund for Scientific Research, Flanders) at the Catholic University of Leuven, Belgium.