Fiscal consolidation in the New EU Member States and their accession to EMU

The objective of this article is the analysis of the fulfilment of the budgetary requirements concerning the accession of the 10 new member states to the European Monetary Union (EMU). The set of convergence criteria was defined in such a way that there is a strong interrelationship among its indivi...

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Bibliographic Details
Published in:Inter economics 2004-09, Vol.39 (5), p.247-253
Main Author: Losoncz, Miklós
Format: Article
Language:English
Subjects:
Accession
Budget deficits
Budgets
Deficit financing
Deutschland
Economic development
EU membership
EU-Erweiterung
Euro
European Monetary Union
Europäische Wirtschafts- und Währungsunion
Eurozone
Fiscal policy
GDP
Gross Domestic Product
Haushaltskonsolidierung
Manycountries
Sanctions
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Summary:The objective of this article is the analysis of the fulfilment of the budgetary requirements concerning the accession of the 10 new member states to the European Monetary Union (EMU). The set of convergence criteria was defined in such a way that there is a strong interrelationship among its individual elements, and because of the various externalities and synergies it is impossible to meet one or two of them at the expense of the others. Nevertheless, the most crucial criterion is the fiscal one. Public finances form the major bottleneck to joining EMU. Fiscal consolidation, too, determines to a large extent the fulfilment of the other convergence criteria. The extraordinary importance of fiscal consolidation is indicated by the fact that accession to EMU is possible only 2 years after the accomplishment of the requirements related to the general government deficit and debt.
ISSN:0020-5346
1613-964X
DOI:10.1007/BF03031782