Transition Issues for the European Monetary Union

Willem Buiter and Anne Sibert

No 1728, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: If Stage Three of EMU starts on 1 January 1999, transition issues remain on two time scales. Until 1 July 2002, national currencies and the euro coexist as legal tender. We argue that intra-EMU currency risk exists in principle during that period, but that no EMU member can be forced out through speculative attacks. Cohabitation of Ins and Outs has an open-ended time scale. We discuss the effect of EMU on incentives for both Ins and Outs to undertake structural reform and the coordination problems associated with the distribution of seigniorage revenue and the Stability and Growth Pact.

Keywords: European Monetary Union; stability and growth pact; Structural Reforms (search for similar items in EconPapers)
JEL-codes: E58 E61 E63 F31 F33 F41 F42 (search for similar items in EconPapers)
Date: 1997-11
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Citations: View citations in EconPapers (7)

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