A Currency Crisis in Europe? - The Europe's Common Currency and the New Accession Countries -

The politically and legally complicated character of the EU Eastern Enlargement heavily influenced the conflict between the legal and economic rationality underlying the construction of the EMR-II. This makes the ERM-II vulnerable to currency crises and creates conditions for a widespread currency and asset substitution in the accession countries. As a result, the required participation of all accession countries in the ERM-II imposes unnecessary costs on the whole enlargement process. The costs could be avoided if the EU adopted a more flexible approach to the enlargement of its monetary union, allowing for an individual path of adopting the euro in each accession country depending on the country's economic conditions.

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Publication Type:
Working or Discussion Paper
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Total Pages:
JEL Codes:
F32; F33; F36
Series Statement:
HWWA Discussion Paper 278

 Record created 2017-04-01, last modified 2018-01-22

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