EUROPEAN MONETARY SYSTEM AFTER SEVEN YEARS OF EXPERIENCE AND THE DILEMMA OF POLISH ENTRY INTO THE EURO AREA
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The aim of the present paper rests in an attempt to sift through the experiences of the past seven years of existence of the single currency mechanism in Europe in order to draw conclusions helpful in shaping the policy of the new EU-member states of Central Europe (especially Poland) with respect to their prospective entry into the euro erea, as envisaged by the Maastricht treaty and their own long-term national strategies. The overall assessment of the performance of the new European monetary arrangements in force since January,1, 1999 is encouraging, in spite of some serious problems which have emerged in the meantime. Those problems, however, represent a serious challenge to the policy makers in both parts of the UE, old and new, and should be given due attention by the candidate countries themselves, as they tend to focus their efforts (somewhat one-sidedly, perhaps) upon meeting the formal criteria of the Maastricht treaty alone. The experience of the older members appears to point to the need to pay more attention to the underlying structural and institutional factors which hamper progress in the desired direction. They may expose the new entrants to the threat of deteriorating competitiveness of their national economies further down the road, unless determined measures are taken to improve flexibility and quality of the institutional framework of their economies. The danger lies in a possible long-term real appreciation of the single currency from the point of view of the new entrants, and the attendant consequences, somewhat resembling the problems Italy and some other member countries have to grapple with. The author favours avoiding excessive rush toward the single currency and opts for sticking to the floating-rate mechanism in the meantime until appropriate conditions for a successful adoption of the single currency are in place.
- K. Lutkowski, Szkola Glówna Handlowa w Warszawie, Kolegium Gospodarki Swiatowej, Katedra Finansów Miedzynarodowych, Zaklad Miedzynarodowego Systemu Walutowego, al. Niepodleglosci 162, 02-544 Warszawa, Poland
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