In the article “Towards a Stronger Euro: EMU Enlargement and Euroization (vs. Dollarization)” by Annamaria Viterbo looks on the similarity and differentiation among euroization and dollarization in particular to the policy adopted by the issuing international organization or state. We can describe the EC attitude towards euroization as a policy of rigorous monetary conditionality. While a swift enlargement of the euro area – as well as of the eurozone – might boost the role of the euro as an international currency, its unilateral adoption by third countries with a weak economic performance could negatively affect price stability and, in turn, the euro’s credibility. For these reasons, before consenting to the euro adoption, the EC strictly monitors the level of convergence of the member states and, at the same time, actively discourages unilateral euroization. On the one hand, in fact, EC Member States can legitimately give the euro legal tender status only after having met the Maastricht convergence criteria, and euroization is precluded for candidate countries prior to their admission to the EC. On the other hand, third countries may adopt the euro by concluding a monetary agreement with the community, but they are discouraged – or at least not encouraged – to euroize unilaterally. Moreover, the community usually makes the conclusion of an agreement on the euro adoption subject in compliance with the “monetary acquis communautaire”. In addition, the benefits perceived by EMU members, by states which euroized through a bilateral agreement and by unilaterally euroized countries are different. For instance, euro seigniorage exclusively accrues to EMU countries, which also achieve a high degree of institutional integration, sitting at the ECB Governing Council and at the meetings of the Eurogroup. Microstates benefit from a high economic and financial integration with EC member states, but are not given voice in monetary policy decision-making. They do not even enjoy observer status at the ECB’s Governing Council meetings or in ESCB/Eurosystem committees.
Towards a Stronger Euro: EMU Enlargement and Euroization (vs. Dollarization)
VITERBO, Annamaria
2008-01-01
Abstract
In the article “Towards a Stronger Euro: EMU Enlargement and Euroization (vs. Dollarization)” by Annamaria Viterbo looks on the similarity and differentiation among euroization and dollarization in particular to the policy adopted by the issuing international organization or state. We can describe the EC attitude towards euroization as a policy of rigorous monetary conditionality. While a swift enlargement of the euro area – as well as of the eurozone – might boost the role of the euro as an international currency, its unilateral adoption by third countries with a weak economic performance could negatively affect price stability and, in turn, the euro’s credibility. For these reasons, before consenting to the euro adoption, the EC strictly monitors the level of convergence of the member states and, at the same time, actively discourages unilateral euroization. On the one hand, in fact, EC Member States can legitimately give the euro legal tender status only after having met the Maastricht convergence criteria, and euroization is precluded for candidate countries prior to their admission to the EC. On the other hand, third countries may adopt the euro by concluding a monetary agreement with the community, but they are discouraged – or at least not encouraged – to euroize unilaterally. Moreover, the community usually makes the conclusion of an agreement on the euro adoption subject in compliance with the “monetary acquis communautaire”. In addition, the benefits perceived by EMU members, by states which euroized through a bilateral agreement and by unilaterally euroized countries are different. For instance, euro seigniorage exclusively accrues to EMU countries, which also achieve a high degree of institutional integration, sitting at the ECB Governing Council and at the meetings of the Eurogroup. Microstates benefit from a high economic and financial integration with EC member states, but are not given voice in monetary policy decision-making. They do not even enjoy observer status at the ECB’s Governing Council meetings or in ESCB/Eurosystem committees.File | Dimensione | Formato | |
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