The author presents the criretia of and prospects for the EU candidate countries joining the European Monetary Union. Enlargement taken as a decided question, she considers EMU accession the “second gate” for candidates. The status of Denmark and the UK are seen as exceptions, the way of which new members may not follow - thus their sooner or later joining the EMU is an obligatory task. The candidates have to meet the convergence criteria, regarding which stress is put on the difference of nominal and real convergence. So, during the at least two years preparing period between EU and EMU accession, strictly supervised “convergence programmes” would be conducted. Financial and economic liberalisation criteria of accession are also expressed. The author presents the main points of the past three stages of introducing EMU, according to which the question for new members of when to join the EMU can be more precisely answered. She focuses on the balance of interests of members and candidates, the trap of early accession, the case of asymmetric, country-specific shocks and also on the problem of giving up national exchange-rate policies. She concludes for new members that the consideration of the ability of fulfilling the above criteria is indispensable for determining a realistic plan of joining the EMU.
Authors:Etienne Farvaque, Florence Huart, and Clément Vaneecloo
This study applies Taylor's (2000) proposed fiscal rule to EU-15 countries. We show that such a simple, flexible and transparent fiscal rule, if applied to individual EMU countries, could improve the enforceability of the Stability and Growth Pact. This rule is used to compute the structural budget balance consistent with a total budget position in balance, given national specificities concerning automatic stabilisers and the output gap. It is thus designed for being consistent with both fiscal discipline and flexibility.
This paper focuses on the roots of strain in the European Monetary Union (EMU). It argues that there is need for a thorough reform of the EU governance structure in conjunction with radical changes in the regulation and supervision of financial markets. The EMU was sub-optimal from its debut and competitiveness gaps did not diminish against the backdrop of its inadequate policy and institutional design. The euro zone crisis is not related to fiscal negligence only; over-borrowing by the private sector and poor lending by banks, as well as a one-sided monetary policy also explain this debacle. The EMU needs to complement its common monetary policy with solid fiscal/budget underpinnings. Fiscal rules and sanctions are necessary, but not sufficient. A common treasury (a federal budget) is needed in order to help the EMU absorb shocks and forestall confidence crises. A joint system of regulation and supervision of financial markets should operate. Emergency measures have to be comprehensive and acknowledge the necessity of a lender of last resort; they have to combat vicious circles. Structural reforms and EMU level policies are needed to enhance competitiveness in various countries and foster convergence.
Linguistic arguments were in some of the new Member States invoked to justify national variations in the spelling of the name of ‘euro’ while, in others, a ‘sovereign right’ was claimed to spell that name in accordance with national language rules and usage traditions. Examining these claims against the background of the current Community language rules and of the exceptions and limitations to the ‘principle of linguistic equality’ inherent in these rules, this article will argue that, while the issue of the spelling of ‘euro’ is not one of language, even if it were to be conceived as such, the Treaty objectives served by a ‘single name for the single currency’ should prevail over arguments in favour of national variations of its name.
The paper analyses the long-run (steady-state) output and price stability of a small, open economy which adopts a “crawling-peg” type of exchange-rate regime in the presence of various kinds of random shocks. Analytical and simulation results suggest that with the exception of money demand shocks, an exchange rate policy which involves a relatively higher rate of indexation of the exchange rate to price level is likely to lead to the worsening of price stability for all types of shocks. On the other hand, the impact of adopting such a policy on output stability depends on the type of the shock; for policy shocks to the exchange rate and shocks to output demand, output stability is worsened whereas for the shocks to risk premium of domestic assets, supply price of domestic output and the wage rate, better output stability is achieved in the long run.
and Exchange Rate Policies of Transition Economies of Central and Eastern Europe after the Launch of EMU . In: Blejer–Škreb (1999) .
MNB ( 1996 ): Elõterjesztés az Igazgatóság részére: A Magyar Nemzeti Bank éves jelentése
of approval. This sheds light on a deeper disagreement among EMU members on the directions that key reforms should take. The debate on the ESM overhaul is all the more crucial as this reform could be one of the few major institutional changes