Nominal, Structural and Real Convergence of the EU Candidate Countries’ Economies

Abstract

Nominal, real and structural convergence within the EU is a strong topic for the central banks and the European Central Bank. Joining the Economic and Monetary Union is a challenge for both acceding and participating economies. The convergence has a strong economic and political implications for the candidate countries for EU membership. Although the theoretical concept about convergence inspires hot debates, there is a need to assess the progress in order to navigate the monetary, fiscal and structural policies. The goal of this article is to consolidate the variety of theoretical views on the convergence and its measurement, and on that basis to assess the progress and the current state of economic convergence to the EU of the four candidate countries. The study reveals large differences between the candidate countries in achieving convergence with the EU. Their experience does not confirm the positive relationship between nominal and real convergence. The structural convergence considered as convergence of sectoral structure has little impact on the real convergence.

Keywords: economic convergence, candidate countries, macroeconomic imbalances

JEL Classification: E5; E6