Where Do the Newest EU Member States Stand on the Road to Monetary Integration?

Abstract

The present study sheds light on important aspects of monetary integration in the European Union involving the newest member states. It assesses the degree to which they satisfy the business cycle correlation criteria.

Our results demonstrate that there is a common business cycle in the Euro area and that most of the candidate countries exhibit convergence with this group, with the remarkable exception of Estonia, Lithuania, Slovakia and Romania. Bulgaria shows better achievements than Romania in terms of business cycle synchronization with the Euro zone.

Keywords: bussines cycle synchronization, Romania, Bulgaria, detrending methods, consensus

JEL Classification: F15, F41, F49