A Multilateral Payments Union for Eastern Europe?
AbstractThe paper analyzes the role of a multilateral payments union (PU) between East European countries (EEPU) as an intermediate solution in the process to full convertibility. After a description of the main functions of a PU, which is based on the historical model of the European Payments Union, it identifies the conditions that justify a PU with trade restrictions vis-a-vis outside countries: above all the existence of unsustainable trade deficits under full convertibility. The paper compares the underlying conditions in East European countries with the situation of the EPU member countries and concludes that an EEPU does not have the potential to repeat the successful performance of the EPU. In addition, it shows that prospective fundamental current account deficits of East European countries can only be estimated after a comprehensive concept of the international monetary integration of East European countries has been developed.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 458.
Date of creation: Sep 1990
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Find related papers by JEL classification:
- F15 - International Economics - - Trade - - - Economic Integration
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
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- Katerina Smidkova, 2003. "Exchange-rate System between the Czech and Slovak Republics," Macroeconomics 0304004, EconWPA.
- Schoors, Koen, 2003. "The effect of Soviet monetary disintegration on the collapse of trade between members of the Commonwealth of Independent States," Economic Systems, Elsevier, vol. 27(1), pages 1-26, March.
- Schmieding, Holger, 1991. "External protection for the emerging market economies? The case for financial liberalisation instead of import barriers in Eastern Europe," Kiel Working Papers 498, Kiel Institute for the World Economy.
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