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The Maastricht Inflation Criterion and the New EU Members from Central and Eastern Europe

  • Karsten Staehr

    ()

This paper discusses the prospects of the new EU members from Central and Eastern Europe joining the European Economic and Monetary Union in the short and medium term. The countries must attain and sustain inflation rates sufficiently low to abide by the Maastricht inflation criterion, but this is complicated by the process of real convergence exerting upward pressure on the inflation rate. The paper discusses different strategies which the new EU countries can apply. It is argued that no one-size-fits-all policy is available and that some countries might be better off postponing EMU membership in pursuit of other goals. Still, the special circumstances concerning the Central and Eastern European EU countries suggest that the process of admission of new countries to the EMU should be adaptive and pragmatic

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Paper provided by Bank of Estonia in its series Bank of Estonia Working Papers with number 2008-04.

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Date of creation: 30 Oct 2008
Date of revision: 30 Oct 2008
Handle: RePEc:eea:boewps:wp2008-4
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  1. György Szapáry, 2001. "Maastricht and the Choice of Exchange Rate Regime in Transition Countries during the Run-Up to EMU," Economics Working Papers 006, European Network of Economic Policy Research Institutes.
  2. Egert, Balazs & Drine, Imed & Lommatzsch, Kirsten & Rault, Christophe, 2003. "The Balassa-Samuelson effect in Central and Eastern Europe: myth or reality?," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 552-572, September.
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  4. Mark A. Wynne & Diego Rodriguez-Palenzuela, 2004. "Measurement Bias in the HICP: What do we know and What do we need to know?," Journal of Economic Surveys, Wiley Blackwell, vol. 18(1), pages 79-112, 02.
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  6. Masso, Jaan & Staehr, Karsten, 2005. "Inflation dynamics and nominal adjustment in the Baltic States," Research in International Business and Finance, Elsevier, vol. 19(2), pages 281-303, June.
  7. Balázs Egert, 2007. "Real Convergence, Price Level Convergence and Inflation Differentials in Europe," CESifo Working Paper Series 2127, CESifo Group Munich.
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  15. F. Gulcin Ozkan & Anne Sibert & Alan Sutherland, 2004. "Monetary union and the Maastricht inflation criterion: The accession countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(4), pages 635-652, December.
  16. Martin Cincibuch & Jiří Podpiera, 2006. "Beyond Balassa-Samuelson: Real appreciation in tradables in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(3), pages 547-573, 07.
  17. Martin Feldstein, 2000. "The European Central Bank and the Euro: The First Year," NBER Working Papers 7517, National Bureau of Economic Research, Inc.
  18. Peter B. Kenen & Ellen E. Meade, 2003. "EU Accession and the Euro: Close Together or Far Apart?," Policy Briefs PB03-09, Peterson Institute for International Economics.
  19. Jonas Fischer & Lars Jonung & Martin Larch, 2007. "101 Proposals to reform the Stability and Growth Pact. Why so many? A Survey," European Economy - Economic Papers 267, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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  22. Jonas, Jiri, 2006. "Euro adoption and Maastricht criteria: Rules or discretion?," Economic Systems, Elsevier, vol. 30(4), pages 328-345, December.
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