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

Mariusz K. Krawczyk

No 26309, Discussion Paper Series from Hamburg Institute of International Economics

Abstract: 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.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 24
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ags:hwwadp:26309

DOI: 10.22004/ag.econ.26309

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