On the Fast Track to EU Accession: Macroeconomic Effects and Policy Challenges for Estonia
November 1, 1999
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Summary
This paper assesses the macroeconomic impact and policy challenges related to Estonia’s prospective accession to the EU and its potential adoption of the euro. Our analysis of the trade, financial, and fiscal channels includes a model-based illustrative scenario using MULTIMOD. We conclude that the welfare enhancing effects for Estonia of further EU integration are likely to outweigh the drawbacks of more pronounced macroeconomic imbalances that could accompany this process. To smooth Estonia’s accession-related adjustment, its fiscal and structural policies should be geared toward mitigating domestic demand pressures, promoting saving, and ensuring efficient public investment.
Subject: Expenditure, Exports, Fiscal policy, Imports, International trade, Tariffs, Taxes
Keywords: Baltics, common market, Eastern Europe, economic integration, Estonia, EU accession, EU country, EU membership, EU regulation, EU request, EU transfer, Exports, Imports, Tariffs, transition, Western Europe, WP
Pages:
41
Volume:
1999
DOI:
Issue:
156
Series:
Working Paper No. 1999/156
Stock No:
WPIEA1561999
ISBN:
9781451857382
ISSN:
1018-5941
