Economic Convergence and Divergence in Europe
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Economic Convergence and Divergence in Europe

Growth and Regional Development in an Enlarged European Union

Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner

This highly topical book addresses the challenge of economic convergence within Europe, beginning with a thorough review of the theory of growth and related empirical research. Historical and more recent economic developments within the present EU and current accession countries are discussed, along with the design for the process of further integration of accession countries into the EU and the Euro area. Moreover, the potential to achieve a sustainable catch-up process in Western Balkan countries, the Ukraine and Russia is explored, focusing on the task facing the EU in designing proper policies vis-à-vis these countries. The contributors’ varied perspectives ensure that the theories and policies postulated are linked closely with the actual situation in accession countries and offer up-to-date insights.
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Chapter 14: Real nominal convergence

Tina Zumer and Uros Cufer


ˇ Tina Zumer and Uros Cufer ˇ ˇ The debate on real and nominal convergence attracts much attention with the accession countries approaching membership of the EU. It is straightforward to talk about nominal convergence criteria, but it is rather unclear what real convergence criteria are. The former were set out in the Treaty of Maastricht, but nothing has been specified about the latter. In EMU the common monetary policy is concerned with the developments in the euro area as a whole and cannot promote the catching-up process of any particular country. Therefore a country’s compliance with real economic convergence criteria is important for the ECB’s policy of maintaining price stability. It is in the interest of Slovenia to fully integrate into EU and EMU as soon as possible. Although no specific additional criteria have been set out for Slovenia’s participation in the EU, the criteria for participating in EMU are of particular interest if monetary integration, first in the form of ERM II, is to follow immediately upon EU membership. For this step the achievement of nominal and real convergence is a necessary precondition. The problem all the accession countries are facing is how to balance the two. They may be seen as a trade-off, but they go hand in hand. There is the potential danger that the candidate countries might, in order to fulfil the nominal convergence criteria, grow at a lower rate than they potentially could and that they might thus not catch up with developed European...

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