Monetary Integration of the New EU Member States: What Sets the Pace of Euro Adoption?

43 Pages Posted: 24 May 2007

See all articles by Ignazio Angeloni

Ignazio Angeloni

Italian Finance Ministry - International Financial Relations

Michael Flad

Goethe University Frankfurt - Department of Finance

Francesco Paolo Mongelli

European Central Bank (ECB); Goethe University Frankfurt

Abstract

How fast should the new Member States of the European Union (NMS) relinquish their domestic monetary and exchange rate autonomy? While the Maastricht convergence criteria are attracting significant attention (particularly the inflation and deficit criteria), we think the debate should also examine the status of their economic structures and the progress of integration within the EU. Diverse aspects of the monetary integration of the NMS into the euro area are examined. We find less structural convergence is associated with less income convergence. The exchange rate regimes have a bearing on the speed of real convergence: for some NMS, and for some more time, exchange rate flexibility may still serve as a useful shock absorber.

Suggested Citation

Angeloni, Ignazio and Flad, Michael and Mongelli, Francesco Paolo, Monetary Integration of the New EU Member States: What Sets the Pace of Euro Adoption?. Journal of Common Market Studies, Vol. 45, No. 2, pp. 367-409, June 2007, Available at SSRN: https://ssrn.com/abstract=987662 or http://dx.doi.org/10.1111/j.1468-5965.2007.00715.x

Ignazio Angeloni (Contact Author)

Italian Finance Ministry - International Financial Relations ( email )

Via XX Settembre 97
Rome, Rome 00187
Italy

Michael Flad

Goethe University Frankfurt - Department of Finance ( email )

Germany

Francesco Paolo Mongelli

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

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