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dc.contributor.authorLavrač, Vladimiren_US
dc.contributor.authorZumer, Tinaen_US
dc.description.abstractCentral and Eastern European (CEE) countries are expected to join the European monetary union(EMU) in a couple of years after their accession to the EU. According to the official views of theEuropean Commission and the European central bank (ECB), monetary integration of CEE countriesin the euro area should be a multilateral, successive and phased process, leading finally to theiradoption of the euro.The paper starts from the description of alternative exchange rate regimes currently in use in Centraland Eastern European EU candidate countries. Their present exchange rate arrangements differsubstantially, as they cover the whole spectrum of possible solutions, from currency boards to floatingexchange rate regimes. By now it is known that these countries will first enter the EU and the ERM 2(exchange rate mechanism, devised for the so-called pre-in countries, as a preparatory stage beforetheir EMU membership), and only a few years later join the EMU and adopt the euro. The papertherefore tries to evaluate present arrangements of the candidate countries from the point of view ofhow compatible these arrangements are with the future ERM 2 and EMU requirements.The paper addresses some issues which are still open in the process of inclusion of CEE countries inthe EMU. First, what are the interests of both parties involved (CEE countries and the EU side)regarding the dynamics of the accession of CEE countries to the EMU, and related to this, what is itslikely scenario (early or late inclusion in the EMU), taking into account the balance of powers betweenthe two sides. Second, the paper discusses the criteria for measuring readiness of individual CEEcountries for joining the EMU. The analysis is focused on the debate on nominal convergence(represented by the famous maastricht convergence criteria) versus real convergence (catching up ineconomic development). In short, the discussion concentrates on the question whether monetaryintegration is possible and desirable among countries at a different level of economic development.Finally, special attention is paid to optimum currency area criteria, not only as a theoreticalbackground for monetary integration, but also as an additional insight into the measurement ofrelative suitability and readiness of individual candidate countries for joining the EMU. As anillustration, the paper attempts to measure some of the optimum currency area indicators for the caseof Slovenia, and finds out that Slovenia is relatively quite suitable for joining monetary integration andrelatively well prepared for joining the euro area. In particular, Slovenia is not expected to be exposedto serious asymmetric shocks, once Slovenia joins the EMU.en_US
dc.relation.ispartofseries|aEzoneplus working paper |x15en_US
dc.subject.keywordExchange Rate Regimes for CEECen_US
dc.subject.keywordOptimum Currency Areasen_US
dc.subject.stwEuropäische Wirtschafts- und Währungsunionen_US
dc.subject.stwOptimaler Währungsraumen_US
dc.titleExchange Rate Regimes of CEE Countries on the Way to the EMU : Nominal Convergence, Real Convergence and Optimum Currency Area Criteriaen_US
dc.typeWorking Paperen_US

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