Eichengreen, Barry --- "The accession economies' rocky road to the euro" [2004] ELECD 158; in Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris (eds), "The Economic Potential of a Larger Europe" (Edward Elgar Publishing, 2004)

Book Title: The Economic Potential of a Larger Europe

Editor(s): Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843769620

Section: Chapter 13

Section Title: The accession economies' rocky road to the euro

Author(s): Eichengreen, Barry

Number of pages: 14

Extract:

13. The accession economies' rocky
road to the euro
Barry Eichengreen1

Now that the decision has been reached to admit to the European Union
eight of what were once called the transition economies, attention has
naturally turned to whether these countries should also adopt the euro.
But whereas there is a consensus that joining the EU, while posing certain
difficulties, will be a source of net benefits, there is no such consensus about
the consequences of monetary union. In part this reflects the unusual
difficulty that monetary economists have in translating theory into policy.
We specialists, in other words, cannot even agree amongst ourselves.
In this chapter I suggest that this uncertainty is unwarranted. Adopting
the euro is clearly superior to the other monetary options available to the
new EU members. These countries are right to be committed to joining the
euro area as soon as possible. And the incumbent members of the euro area
should be happy to have them. To be sure, enlarging the monetary union
will pose difficulties for both the incumbents and the new members. But
these are minor compared to the difficulties that will arise under other scen-
arios. From this point of view, it is regrettable that the incumbents appear
to be placing unnecessary obstacles in the path of the aspirants.


1. OPTIONS

On 1 May 2004 the ten new member states of the European Union will join
EMU with a derogation (that is, they will not be obliged to adopt the euro
at ...