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Pitfalls in the European Enlargement Process: Financial Instability and Real Divergence


  • Wagner, Helmut


Many of the EU accession countries have announced that they will not only try to enter the EU as quickly as possible but also to adopt the euro at an early date. This is justified by the effort to avoid the danger of financial instability in the period prior to euro-introduction. However, by trying to avoid this danger, the CEECCs, at least the (economically, institutionally and technologically) less developed, may run into another danger or pitfall, namely of real divergence (or very slow real convergence). The paper investigates these dangers or pitfalls. It argues that for some accession countries the costs of entry at an early date may be very high, and that there may also be negative spillovers for the other accession countries and for the EU core countries.

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  • Wagner, Helmut, 2002. "Pitfalls in the European Enlargement Process: Financial Instability and Real Divergence," Discussion Paper Series 1: Economic Studies 2002,06, Deutsche Bundesbank.
  • Handle: RePEc:zbw:bubdp1:4171

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    References listed on IDEAS

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    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Philipp Maier & Maarten Hendrikx, 2002. "Implications of EMU enlargement for European monetary policy: A political economy view," Macroeconomics 0207007, EconWPA.
    2. I.S. Meister, 2002. "Is Eastern Europe ready for the Euro? A Cointegration Analysis for the Maastricht Criteria," WO Research Memoranda (discontinued) 699, Netherlands Central Bank, Research Department.

    More about this item


    European Integration; Transition Economies; Monetary Policy; Financial Instability; Real Convergence; Anticipatory Recession;

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • P2 - Economic Systems - - Socialist Systems and Transition Economies


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