How to live with the euro? Central and Eastern European countries’ experiences.
The euro, the common European currency, is celebrating its 20th birthday. There are no fireworks on this occasion. There are, however, constant discussions about whether the euro is a bind or a threat. The report: “How to live with the euro? Experiences of Central and Eastern European countries” presents hard data, without any emotions. The project has been developed by the team under the direction of Prof. Witold Orłowski, the Rector of the Vistula University.
The eurozone consists of 19 EU members, who use the euro, including several countries from Central and Eastern Europe. The team headed by Prof. Witold Orłowski, the Rector of the Vistula University, which included our lecturers, Ph.D. Bartłomiej Nowak and Ph.D. Marta Götz, has described the introduction of the single currency’s effects in Slovakia and in Baltic republics – Estonia, Lithuania, and Latvia.
“The report focuses on the experiences of 4 Central and Eastern European countries that have introduced the euro, with a similar level of development and history of economic transformation close to Poland” the authors emphasise.
The report contains the following conclusions:
- the adoption of the euro has contributed moderately positively to improving the economic performance of Slovakia, Latvia, and Lithuania, and in a definitely positive way to improving economic growth in Estonia;
- the adoption of the euro was not associated with the deterioration of the current account deficit, and the increase in foreign debt in the four countries surveyed; it means that these countries did not repeat the mistakes made by the southern EU countries, after the introduction of the single currency;
- thanks to the good preparation of the 4 countries surveyed for currency exchange, the introduction of the euro did not result in significant price increases there; however, the spectacular rise of prices of some goods, caused perceived inflation to be clearly higher than the real one; but without any doubts, it can be said that, contrary to the opinion expressed, the adoption of the euro itself, does not trigger the process of approaching the price level to that observed in the richer West European countries;
- the adoption of the euro was associated with high political benefits for the countries studied, both – direct and indirect; these countries increased their influence on the direction of changes in the Union’s reforms, the ability to build coalitions, and push their interests in the EU, and meanwhile, their sense of security also increased;
- the support for the common currency is expressed by the majority of the population from these four countries: Estonia, Slovakia, and Latvia, with the support of 80-85%, are among the EU’s countries best evaluating the euro – this is an expression of the satisfaction of the societies with the adoption of the euro.
The eurozone is not just a single currency, today. This is a comprehensive integration project, the largest since the establishment of the Uniform Market. The zone becomes the EU “hardcore”. It will have its own budget soon.
The publication was created with the support of European Commission funds, as part of the Europe for Citizens programme.
