THE PROCESS OF NOMINAL AND REAL CONVERGENCE UNDER THE CONDITIONS OF MONETARY INTEGRATION

Abstract

The creation of the Economic and Monetary Union is the next stage of monetary integration. Due to differentiation between Member States of the European Union, expenses and profits of participation in Eurosystem are not spread similarly. The first part of this paper reviews the fulfillment of nominal Maastricht criteria (stability of public finances, prices, exchange rate and interest rates). The second part presents the state of real convergence between countries either belonging to or aspiring to European Economic and Monetary Union (flexibility of prices and salaries, mobility of means of production, integration of financial markets, openness of economy, diversification of production and consumption and similarity of economic disorders). Analyses are based on available statistical data and scientific research.

nominal convergence, real Convergence, monetary integration