Economic Convergence and Divergence in Europe Growth and Regional Development in an Enlarged European Union
Growth and Regional Development in an Enlarged European Union
Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner
Chapter 17: Real and nominal convergence: challenges for monetary and exchange rate policy Â… the case of Slovakia
17. Real and nominal convergence: challenges for monetary and exchange rate policy – the case of Slovakia Marián Nemec 17.1. INTRODUCTION1 EU accession has become one of the driving forces behind Slovakia’s adjustment and reform eﬀorts. In December 1999 the Helsinki summit approved Slovakia as a candidate for membership and negotiations for the country’s entry to the European Union are under way. After the Swedish presidency, Slovakia had opened all 29 chapters, and negotiations for 20 chapters have meanwhile been preliminarily closed. The European Commission has conﬁrmed that Slovakia largely meets the Copenhagen criteria for EU membership. Following the 2000 Regular Report on Slovakia’s progress toward accession, Slovakia can be regarded as a functioning market economy and should be able to cope with the competitive pressure and market forces within the Union in the medium term, provided that the structural reform agenda is fully implemented and broadened to include remaining reforms. In 2001 further progress was achieved. At the same time, while the accession process continues, the topics related to real and nominal convergence and respective policy issues have to be speciﬁed so as to outline the optimal path for the accession process. This chapter discusses some of these issues and is organized as follows. Section 17.2 presents the basic characteristics of the present state of the real and nominal convergence of the Slovak economy to that of the EU. Section 17.3 deals with the current policy design and with future challenges. Section 17.4 presents some basic...
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