Central and eastern European financial systems: towards integration in the European Union
Serie: Documentos de Trabajo. 9625.
Autor: María Jesús Nieto Carol.
Documento completo
Resumen
EU membership has become the primary goal for CEECs and the prospect of their eventual integration has already been taken into account by the European Council. In this context, the paper presents the substantial progress made on the macroeconomic stabilization as well as on the microliberalization and the institutional restructuring of the financial system. Against this background, the paper considers the challenges faced by CEECs' financial systems in the preparation for EU integration. Two key areas of pressure on fiscal and monetary prudence exist: substantial overhang of banking sector liquidity and incomplete transformation of inherited social programs. Also, it is still too soon even for those countries more advanced in the process of stabilization to lose autonomy in the management of exchange rate policy. As a consequence, transition to participation in monetary union may take a long time and when it happens cannot be but gradual because of the different development of the potential member countries.