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Exchange rate arrangements in EU accession countries: what are the options?


  • Meade, Ellen E.
  • Müller-Plantenberg, Nikolas
  • Pisani, Massimiliano


Several countries in eastern Europe may accede to the European Union in about two years time, making them candidates to join Europe's single currency from 2006. Some well-known economists have advocated that countries in eastern Europe adopt the euro now either unilaterally or by prior arrangement with the EU. Such official currency substitution is typically termed ''dollarisation'' or ''euroisation'', and is the most extreme form of a hard peg currency regime. This paper brings together perspectives from a conference ''Dollarisation and Euroisation: Viable Policy Options?'' held at the LSE in May 2002. We discuss a number of issues associated with dollarisation or euroisation, including: the credibility of the monetary regime, the implications for domestic inflation, the importance of other macroeconomic policies, the reversibility of hard peg currency regimes, the outlook of the reserve currency issuer, and the broader context in which dollarisation or euroisation is pursued. Finally, we address some particular issues associated with euroisation for EU accession countries. Euroisation prior to EU accession may help to forestall a speculative attack, but it must be implemented in a way that is consistent with the Maastricht Treaty and does not impede progress toward EMU membership.

Suggested Citation

  • Meade, Ellen E. & Müller-Plantenberg, Nikolas & Pisani, Massimiliano, 2002. "Exchange rate arrangements in EU accession countries: what are the options?," LSE Research Online Documents on Economics 28754, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:28754

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    Cited by:

    1. Antonín Rusek, 2005. "Financial Integration and the New EU Member Countries: Challenges and Dilemmas," Prague Economic Papers, University of Economics, Prague, vol. 2005(1), pages 17-32.
    2. Marko Malovic & Malisa Djukic & Srdjan Redzepagic, 2011. "Maastricht Criteria at the Age of 18: Are They Converging, Which Party and to What End?," Book Chapters, in: Mirjana Radovic Markovic & Srdjan Redzepagic & João Sousa Andrade & Paulino Teixeira (ed.), Serbia and the European Union: Economic Lessons from the New Member States, edition 1, volume 1, chapter 1, pages 11-26, Institute of Economic Sciences.
    3. Martina Horníková & Jaromír Hurník & Viktor Kotlán, 2005. "Spontaneous Euroization in the Czech Republic (is it a problem and why not?)," Prague Economic Papers, University of Economics, Prague, vol. 2005(2), pages 99-108.

    More about this item

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General


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