Table of Contents

European Economic Integration and South-East Europe

European Economic Integration and South-East Europe

Challenges and Prospects

Edited by Klaus Liebscher, Josef Christl, Peter Mooslechner and Doris Ritzberger-Grünwald

With both transition dynamics and the EU integration process having shifted to the south-east of Europe, a region fairly marginalized in the literature, this book fills a gap by taking stock of where South-East Europe’s economies and institutions stood in 2004. The authors evaluate the potential for investment and growth within the South-East European region, including the role of trade and FDI, and discuss the challenges associated with unemployment, poverty and ‘brain drain’. The book also provides insights into the particular monetary and exchange rate policies applied, including cases of ‘euroization’, and finally makes an assessment, against this background, of the European perspective of the countries of South-East Europe.

Chapter 8: Monetary policy in a euro-dominated environment: challenges for central banks in South-East Europe

Peter Mooslechner and Doris Ritzberger-Grünwald

Subjects: economics and finance, regional economics, urban and regional studies, regional economics

Extract

Peter Mooslechner and Doris Ritzberger-Grünwald1 1. GENERAL INTRODUCTION The political stabilization of South-East Europe (SEE), a region widely disadvantaged in the past, has paved the way for a new, much broader focus on Eastern Europe. In the 1990s the economic debate had concentrated on the countries coming within immediate reach as the Iron Curtain fell. These countries were not only the key agents of economic reform, but also the preferred destination of firms and banks trying to participate in the economic upswing. Going further south-east at the time would have meant leaving safe ground in a political and an economic sense. The attractiveness of, and the attention paid to, SEE has since increased significantly, however. The end of the wars that destabilized the region in the late 1990s led to an economic upswing, outperforming the upswing in the new EU member states – but also proceeding from a much lower base. With the prospect of EU accession in 2007 or 2008 at the latest for Bulgaria, Romania and – with some delay – for Croatia, growth rates are in fact likely to go up further. Unlike many other states located in the EU neighbourhood (Mediterranean countries or the CIS), all other SEE countries have in fact received clear signals from Brussels that in the long run they would also be welcomed as EU members. This makes the whole region interesting from a monetary policy point of view, as monetary policy becomes a matter of common interest upon EU accession (Fidrmuc and...

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