In Eastern Europe, Cold Feet About Joining the Euro

July 4, 2011 at 7:00 am

First join the European Union, then qualify for the euro. That was the path laid out for the countries of Eastern Europe that wanted to weld themselves to the West. Euro membership proved that a country had the discipline to join one of the world’s most exclusive clubs.

The Greek crisis has slowed the rush to join. On June 7, Latvia’s central bank governor, Ilmars Rimsevics, said the euro shouldn’t be introduced in his country “at any price.” His Lithuanian counterpart, Vitas Vasiliauskas, said two days later that the goal of adopting the euro in three years is “not something to kill yourself over.” On May 20, Poland’s central bank governor, Marek Belka, said his country and the region would not get the benefits they had anticipated from a quick adoption of the euro. And as far back as December, Czech Prime Minister Petr Necas said his country can refuse to adopt the single currency as long as it deems it beneficial to keep the koruna.

The struggle to stem the Greek contagion has shown the East Europeans, who have endured many crises of their own, that the euro zone is hardly immune. More alarming to these countries is the idea that if they were in the euro zone, they would be coughing up billions to a bailout fund for Greece, Portugal, and Ireland.  Read more.

O. Ummelas, A. Eglitis, Bloomberg Businessweek, June 23, 2011

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Entry filed under: Eastern Europe, Euro.

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