MEASURES TO RECALIBRATE THE MACROECONOMIC POLICIES IN THE NEW EU MEMBER STATES THAT ARE TO ADOPT THE SINGLE CURRENCY

Napoleon Pop, Camelia Milea, Iulia Lupu, Adina Criste, Alina Georgeta Ailincă (), Floarea Iordache and Alina Rotaru
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Floarea Iordache: Centre for Financial and Monetary Research “Victor Slăvescu”, Romanian Academy
Alina Rotaru: "Spiru Haret" University, Bucharest, Faculty of Finances and Banks Bucharest, Faculty of Finances and Banks

Studii Financiare (Financial Studies), 2011, vol. 15, issue 1, pages 171-189

Abstract: As of September 2008, the vulnerabilities accumulated during the previous periods overlapped the devastating effects of the crisis in the new member states (NMS) of the European Union, deteriorating the main macro-indicators and increasing the economic instability, which generated a profound process of adjustment. Under the conditions of the economic crisis, the accomplishment of the criteria of nominal convergence, necessary in order to adopt the euro, is a real challenge for all the new member states; this materialized primarily in the increase of the exchange rate volatility and of the fiscal-budgetary deficits. During this period of great incertitude and national, regional and international disturbances which spread throughout the world states touched by the economic globalization process, the NMS need a balanced mix of macroeconomic policies adapted to the new conditions that will allow them to preserve their stability. Thus, the monetary policy should have a supportive role for the domestic economies of the NMS, while the fiscal policy should be a key macroeconomic instrument which to compensate the limited capacity of the monetary policy under the conditions of the economic recession, being an important short-term support for the economy.

Keywords: global economic and financial crisis; nominal convergence; public debt; monetary policy; foreign deficit (search for similar items in EconPapers)
JEL-codes: E24 E31 E43 E52 E62 F31 F32 G01 H63 (search for similar items in EconPapers)
Date: 2011
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