Central and Eastern Europe: New Member States (NMS) Policy Forum, 2014, Selected Issues Paper
IMF Staff Country Reports, April 7, 2015
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Bibliographic details
- Published: April 7, 2015
- Series: IMF Staff Country Reports
Objective and scope
- Objective: illustrate economic benefits and costs from euro adoption by reviewing the main arguments and empirical evidence in Central and Eastern Europe: New Member States (NMS).
- Focus: trade-offs associated with euro adoption given changed parameters of the euro adoption debate since the 2000s.
Main findings
- The country risk premium that countries joining the euro area in the 2000s could expect has "mostly vanished with the euro crisis."
- NMS that maintained exchange rate flexibility and monetary policy autonomy have, in general, made good use of it.
- During convergence, nominal currency appreciation:
- supported more balanced growth, and
- restrained credit and asset price booms.
- It is an open question whether the macroeconomic volatility of the past decade will recur.
- If divergent growth patterns and volatility were to repeat, euro adoption would:
- constrain macro-policy options, especially for economies with large income gaps and asynchronized business cycles vis-à-vis the euro area, and
- place a large burden on other policy instruments to safeguard balanced growth.
Policy implications and recommendations
- A large burden would be placed on:
- counter-cyclical fiscal policy, and
- macro-prudential policies.
- Structural reforms are important to:
- boost growth potential, and
- facilitate internal adjustment.
Key topics and themes
- Bank resolution framework
- Banking
- Currencies
- Expenditure
- Exports
- Financial crises
- International trade
- Labor
- Money
- Pension spending
- Pensions
International Monetary Fund. European Dept. "Central and Eastern Europe: New Member States (NMS) Policy Forum, 2014, Selected Issues Paper", IMF Staff Country Reports 2015, 098 (2015), accessed 9/13/2026