An Overview to the Exchange Rate Stability as A Criterion of the Accession to the Euro Zone

• Authors: Wawrzyniec Michalczyk
• Languages of publication: EN

Abstracts

EN

The paper's objective is to present the results of an analysis of the exchange rate convergence criterion fulfilment by the European Union member states which still use their national currencies and the indication of the fundamental determinants that affect their ability to meet it. There is essential legislation on this criterion indicated, as well as on the ERM2 system which is directly related to it, and the stability of the currencies of EU countries is also briefly examined. The major conclusions include the statement that the interpretation of legal provisions on the exchange rate convergence crite rion allows large subjectivity in assessing its fulfilment by each country. On the other hand, significant fluctuations in exchange rates during recent years, can impede considerably their stabilisation prior to the accession to the euro area and extend the necessary stay in ERM2 system, which in turn will in crease the risk of speculation connected with it. Therefore, justified to a certain extent may seem pro posed abolition of the obligation to formal accession to ERM2 and replacing it with a quantitative criterion related solely to exchange rate fluctuations.

Keywords

EN

exchange rate; convergence criteria; ERM2; euro zone

• Publisher: Sciendo
• Journal: Folia Oeconomica Stetinensia
• Year: 2012
• Volume: 10
• Issue: 1
• Pages: 120-130

Dates

published

2011-01-01

online

2011-11-09

Contributors

author

Wawrzyniec Michalczyk

• Wroclaw University of Economics

References

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Identifiers

DOI

10.2478/v10031-011-0013-2