EVALUATION MODEL OF THE REAL CONVERGENCE OF THE CENTRAL AND EAST EUROPEAN STATES IN RELATION TO EMU
AbstractThe accomplishment on short term of the nominal convergence criteria does not represent a guarantee for the fact that the single currency adoption will ensure the EMU performance. Analyzing the GDP/capita, the economic opening degree, weight of the bilateral trade with the community states as part of the foreign trade and the national economy structure, we observe that among the Central and Est European states, now EU members, Latvia, Poland, Lithuania, Bulgaria and Romania are characterized by a low real convergence in comparison to the Eurozone. The increase of the international competitiveness is essential for the economies of these states, and EMU does not favor this action because, inside a monetary union, the macro-economic policy is more restrictive. Romania, Lithuania and Bulgaria appear to be disadvantaged by the perspective of single European currency adoption because the trade connections with the Community states are less intense – their intra-community trade does not exceed 2/3 of the total foreign trade – and at the same time are significantly different from the Eurozone economic structure. Therefore, in this case, the adhesion to the Euro must be postponed for a long period of time that will allow both intensification of trade connections with other EU member states, and also the structural transformation of national economies. Taking into account de analyzed indicators, entrance of Poland in Eurozone is first conditioned by improvement of the economic performances and for these is necessary to preserve the monetary and foreign currency policies interdependence.
EU/Eurozone, optimum currency areas, monetary policy, real convergence, asymmetric shocks.