<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>The paper's objective is to present the results of an analysis of the exchange rate convergence criterion fulfilment by the European Union member states which still use their national currencies and the indication of the fundamental determinants that affect their ability to meet it. There is essential legislation on this criterion indicated, as well as on the ERM2 system which is directly related to it, and the stability of the currencies of EU countries is also briefly examined. The major conclusions include the statement that the interpretation of legal provisions on the exchange rate convergence crite rion allows large subjectivity in assessing its fulfilment by each country. On the other hand, significant fluctuations in exchange rates during recent years, can impede considerably their stabilisation prior to the accession to the euro area and extend the necessary stay in ERM2 system, which in turn will in crease the risk of speculation connected with it. Therefore, justified to a certain extent may seem pro posed abolition of the obligation to formal accession to ERM2 and replacing it with a quantitative criterion related solely to exchange rate fluctuations.</p></abstract>

The paper's objective is to present the results of an analysis of the exchange rate convergence criterion fulfilment by the European Union member states which still use their national currencies and the indication of the fundamental determinants that affect their ability to meet it. There is essential legislation on this criterion indicated, as well as on the ERM2 system which is directly related to it, and the stability of the currencies of EU countries is also briefly examined. The major conclusions include the statement that the interpretation of legal provisions on the exchange rate convergence crite rion allows large subjectivity in assessing its fulfilment by each country. On the other hand, significant fluctuations in exchange rates during recent years, can impede considerably their stabilisation prior to the accession to the euro area and extend the necessary stay in ERM2 system, which in turn will in crease the risk of speculation connected with it. Therefore, justified to a certain extent may seem pro posed abolition of the obligation to formal accession to ERM2 and replacing it with a quantitative criterion related solely to exchange rate fluctuations.

An Overview to the Exchange Rate Stability as A Criterion of the Accession to the Euro Zone

Folia Oeconomica Stetinensia

The paper's objective is to present the results of an analysis of the exchange rate convergence criterion fulfilment by the European Union member states which...

An Overview to the Exchange Rate Stability as A Criterion of the Accession to the Euro Zone

Published Online: Nov 09, 2011

Page range: 120 - 130

DOI: https://doi.org/10.2478/v10031-011-0013-2

Keywords
exchange rate, convergence criteria, ERM2, euro zone

This content is open access.

An Overview to the Exchange Rate Stability as A Criterion of the Accession to the Euro Zone

Published Online: Nov 09, 2011

Page range: 120 - 130

DOI: https://doi.org/10.2478/v10031-011-0013-2

Keywordsexchange rate, convergence criteria, ERM2, euro zone

This content is open access.

Keywords
exchange rate, convergence criteria, ERM2, euro zone