Euro accession and adoption - Key considerations, Drexel University presentation, 5/18/2011

1. Euro accession and adoption: Key considerations Presented by: Nina Covrljan, CnC partners Drexel University, 5/18/2011 www.cncpartners.net

3. Overview of key requirements:

4. Country must be a member of the European Union.

6. The adoption process consists of two stages:

7. Stage I: Accession to the EU (fulfillment of the Copenhagen criteria: political, economic etc.).

8. Stage II: Euro area accession. During this phase, the country is deemed to be a “Member state with a derogation” and must fulfill the following obligations:

9. Pursue price stability as the primary objective of monetary policy in preparation for joining the ERM II.

12. Key benefits:

13. The new member gains a new level of fiscal credibility which may result in lower inflation rate.

14. Elimination of exchange rate risk (within EU) and possibly benefit from lower interest rates.

16. Loss of control (and flexibility) over monetary policy.

18. Estonia: The most recent member (as of 1/1/2011).

19. Countries on the waiting list: Bulgaria, Czech Republic, Latvia, Lithuania, Hungary, Poland, Romania and Sweden.

20. Considering de-coupling: Greece.Source: European Central Bank- Adoption of the Euro: principles, procedures and criteria (2/13/2008). .

21. Q&A Contact information: Nina Covrljan, CnC partners E-mail: ncovrljan@cncpartners.net www.cncpartners.net To download file: scribd.com/ninacovrljan