This Summary Report reflects outcomes of the research project "The Eastward Enlargement of the Eurozone (Ezoneplus)" that has analysed these challenges with particular emphasis on monetary and fiscal policies, on exchange-rate regimes and on the social dimension of the EMU enlargement process. It will be shown that structural asymmetries in an enlarged currency union will only slowly proceed towards a convergence of welfare states across EU-25. The pace of this process depends largely on the willingness and capability of political decision-makers at all levels to coordinate the policies in question.

In May 2004, eight countries of Central and Eastern Europe were admitted to the European Union (EU). In January 2007, Romania and Bulgaria, and in July 2013, Croatia were admitted to the EU. These new EU member states (NMS) are not given the right to opt out as the UK and Denmark have, and they are obligated to adopt the Euro. Among eleven new member states, five countries adopted the euro: first Slovenia (2007), followed by Slovakia (2009), Estonia (2011), Latvia (2014) and Lithuania (2015). This book considers the problems of the Eurozone Enlargement by reviewing the experiences of NMS which have adopted the Euro and considering prospects of NMS which have not yet adopted the Euro. The book is divided into two parts. Part One mainly deals with NMS which have already adopted the Euro and takes a closer look at their experiences. Chapter One explains the evolution and the current situation of the EMU in order to get an overall picture of the Eurozone. Chapter Two discusses Slovenias experiences of the euro adoption and its lessons. Chapter Three discusses the experiences of Slovakia which adopted the euro in January 2009 exhibiting, in contrast to Slovenia, a favorable performance. Although having seriously suffered from the 2008 global financial crisis, the Baltic States have recovered quickly. Chapter Four discusses what kind of lessons could be drawn from the experiences of the Eurozone NMS, focusing on Latvia and Slovakia. Part Two deals with the NMS which have not adopted the Euro yet, but are expected to. Chapter Five not only discusses Polands prospects for Euro adoption but also serves as an introduction to Part Two as a whole. It deals with not only the criteria which should be met by prospective Eurozone member NMS, i.e. explicit Maastricht convergence criteria, but also the criteria of implicit and substantial convergence. The Czech Republic and Slovakia have been maintaining close economic relations in spite of their separation in 1993. Slovakia adopted the Euro in January 2009 while the Czech Republic has not yet adopted it. Chapter Six discusses the current situation and challenges of the Czech Republic in comparison with Slovakia. Chapter Seven analyzes the Hungarian situation both from a perspective of a comparison with other CEE countries, and from a historical perspective of its long-term transition process. Chapter Eight considers challenges facing Croatia, which has an industrial structure quite similar to Greece. Among prospective Eurozone member states, Romania is the only one country which has its target date for Euro-adoption of January 1, 2019. Chapter Nine considers Romanias current situation and its challenges. Chapter Ten discusses challenges facing Bulgaria, which has maintained the currency board system. Although the Western Balkan countries are not discussed directly, this book has important implications for them. The authors of the book include five economists from Central Eastern Europe and three economists from Japan. This book is a product of international academic cooperation between Europe and Asia.

The Eastern Enlargement of the EU will not be complete until the new member states join the EMU. Economic and political economy arguments point to fast EMU accession of new member states. Failure to do so will create a two speed Europe, a fundamental change in the economic and political architecture of the EU, adding to the strains already evident between core and peripheral countries. Current high level of trade and business cycle integration of new member states with the Eurozone, decreases the probability of asymmetric shocks. Lower transaction costs, elimination of exchange rate risk and the danger of currency crises, further trade and investment creation, lower interest rates and large fiscal gains, should outweigh the loss of the exchange rate as adjustment tool. The Eastern Enlargement of the Eurozone provides comprehensive economic analysis of theoretical, empirical and political issues that will determine whether EMU enlargement is a success, which has implications for all common currency systems.

This book seeks to offer the first in-depth and systematic analysis of the challenges of the Euro Area and the eastward enlargement of the European Union. It focuses in particular on how the prolonged process of accession to the Euro Area is affecting domestic economic policies in the accession states of east central Europe. It contributes to Europeanization studies, comparative political economy and to studies of Economic and Monetary Union. It also provides a picture of processes of domestic transformation in such countries as the three Baltic States, Bulgaria, the Czech Republic, Hungary, Poland and Romania. The book brings together a range of recognized experts from across Europe and combines country and sectoral case studies with a thematic treatment. It begins by offering an 'outside-in' perspective, which situates the effects of EMU on the accession states in the wider context of the development of global economic norms. The second part focuses on an 'inside-out' analysis of how Euro Area accession affects the states of east central Europe - their policies, politics and public institutions. The final part assesses how Euro Area accession is affecting key policy sectors in east central Europe: financial market regulation, fiscal policies and welfare states and labour markets.

This work examines the political economy of exchange-rate policies in the eastward expansion of the eurozone. Analysis shows that prospective members of the EMU are likely to pass on some costs of convergence to the current EMU members. The mechanism is an altered exchange-rate policy that utilizes a "threaten-thy-neighbour" strategy. This could ensure a stabilization of the CEECs' convergence toward the EMU, and a successful eastward enlargement of the eurozone.

Leading international economists assess the effects of the 2004 expansion of the European Union. In May 2004 the European Union will undergo the largest expansion in its history when ten countries -- Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia -- become members. The number of new members and their diversity make this "big bang" enlargement particularly challenging. Not only do these countries vary widely in language, culture, and geography, but also their per capita income is less than half that of existing members. EU officials believe that expanded integration will serve the EU's objectives of peace, stability, prosperity, and democracy; but the less abstract questions of costs and benefits of enlargement are more complex. Each of the chapters in this CESifo volume addresses a different aspect of EU expansion. The contributors, all leading international practitioners and scholars, consider such topics as the effect of euro zone expansion on European Central Bank monetary policy making; using the euro as an external anchor for a national currency; worker migration and income differentials; the Swiss experience with immigration policy in a direct democracy framework; detailed sector analysis using a computable general equilibrium model of the world economy; investment and job creation and destruction in incumbent member countries; and the asymmetric effects of enlargement on high- and low-income incumbent countries. Taken together, the chapters provide useful guidance in shaping the EU policies of the future.

This book explores one of the central challenges facing the EU today – how to reconcile enlargement with the pursuit of a stronger and more effective European Union. While the relationship between widening and deepening has been recognized for years as one of the big questions in the field of European integration, existing theoretical and empirical analyses of this relationship suffer from a variety of shortcomings. This book brings together a group of EU scholars who significantly advance our understanding of the relationship between widening and deepening. The contributors challenge a variety of ‘common wisdoms’ concerning the relationship between widening and deepening and offer nuanced theoretical and empirical analysis of the relationship between these two vital dimensions of European integration. Collectively, the contributors to this volume offer the most comprehensive picture available to date of the multi-faceted relationship between widening and deepening. This book was published as a special issue of the Journal of European Public Policy.

Before the latest EU enlargement substantial changes in the integration process were predicted as a result of the accession of 10 new member states, with some forecasting cataclysmic consequences. This book, the first ex post assessment of EU enlargement, provides evidence to the contrary, while also providing examples in which the new members have been able to influence the EU policy output with their liberal attitudes on economic and social policy.

Where is Europe going? In this 2007 collection, several prominent European economists offer essays on the five big challenges to the development of the European Union (EU). Namely, the new European Constitution, European finances and the euro, the need to boost economic growth, competition in both new member states and countries further to the East, and the goal of forming a cooperative and productive relationship with countries on the European periphery. The book includes essays by Charles Wyplosz, who argues that enlargement and deepening are not substitutes but complements; Vito Tanzi who questions the Keynesian foundation of the Growth and Stability Pact; Daniel Gros, who criticises the achievements within the Lisbon Agenda, as well as essays by Anders Aslund, who claims that Russian and Ukrainian oligarchs differ little from US 'robber barons'. The final two chapters discuss the EU's European Neighbourhood Policy and long-term economic integration in Eurasia. Listed in the Economist Top 100 Books of 2007.

The effects of the Eastern enlargement, the biggest so far, are still felt across the European Union (EU). Many warned the EU was about to overreach the limits of its integration capacity. More than a decade later, this book presents a broad-based and systematic evaluation of the 2004–2007’s enlargement and its impact on the EU. In contrast to widespread scepticism, our results show that the EU’s integration capacity has been strong. Credible accession conditionality and pre-accession assistance have had a positive impact on democracy, governance capacity, and economic transformation, at least before accession. After accession, EU institutions have proven resilient. Eastern enlargement has not affected negatively the legislative capacity of the EU. It has not led to a deterioration of compliance and implementation of EU law either; initial differentiated integration has quickly returned to normal levels. This generally positive assessment stands in stark contrast with increasing public opposition to future EU enlargements. We identify some less known sources of such opposition: the lack of communication and political debate about enlargement between EU leaders and their citizens. Public opposition undermines the credibility of EU conditionality, which is crucial for having a positive impact on neighbouring countries in the future. The chapters in this book originally appeared in a special issue in the Journal of European Public Policy.