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Financial and Monetary Integration in the New Europe

Financial and Monetary Integration in the New Europe

Convergence Between the EU and Central and Eastern Europe

Edited by David G. Dickinson and Andrew W. Mullineux

Potential new entrants to the European Union from Central and Eastern European countries face many challenges to achieve financial convergence with the existing EU nations. Using detailed case studies from Bulgaria, the Czech Republic, Latvia, Lithuania and Poland and analysis of cross country data from these regions, Financial and Monetary Integration in the New Europe looks at the key issues for applicant countries as they negotiate the terms of their membership in the European Union. Of major concern to these countries is the financial sector and its implications for economic growth and the conduct of macroeconomic policy. The book examines, in particular, monetary and exchange rate policies, banking regulation and financial market efficiency. The overall impact of building a market driven financial system on economic development is also explored.

Chapter 9: EMU convergence criteria and international flows of capital: the dilemmas for Polish macroeconomic policy

Boguslaw Grabowski and Jerzy Pruski

Subjects: economics and finance, financial economics and regulation


Boguslaw Grabowski and Jerzy Pruski INTRODUCTION From the very beginning, Poland has sought to join the European Union (EU) at the earliest possible date. The same priority was given to joining the North Atlantic Treaty Organization (NATO). The first goal was broadly recognized and immediately accepted by all political parties while the second received strong nationwide support after a short period of discussion by the left-wing party. As a result of such priorities in Polish foreign policy as well as an open attitude from the EU, the Polish Association Agreement with the EU was signed in 1991. Three years later Poland submitted a formal application for full EU membership. In 1996, Poland finalized negotiations and became a member of the Organization for Economic Cooperation and Development (OECD). Poland was invited to join NATO in 1997 and became a full member on 12 March 1999. Finally, in 1998 Poland was invited to join full accession talks with the EU, which have been continuing since then. On 1 January 1999, ÔeurolandÕ was established. The group of founder members of the European Monetary Union (EMU) consisted of 11 countries. After fulfilling the Maastricht criteria, Denmark, Sweden and the UK postponed their decision about participation in EMU. Greece is expected to join EMU after meeting macroeconomic criteria. This group of four countries constitutes the expected second wave of EMU membership. The Czech Republic, Cyprus, Estonia, Hungary, Poland and Slovenia may create the third wave of EMU enlargement. The latest group of countries, with Greece,...

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