Joining Euro(pe)
I wrote a piece on the Crimson last week about the prospect of Eastern Europe joining the euro early. I still firmly believe the essential tradeoff between confidence and giving up monetary freedom makes sense for Poland, Hungary, and the Czech Republic. Granted, not all of these countries have behaved in the same way with respect to foreign funds (read Hungary has been really, really irresponsible – and it is not the first time for the area, even if they were not fully in control back then). But they all need the same thing: Given their trade connections with Western Europe (and specifically, the euro area), they need the market confidence to keep going, reignite their economies, and continue to receive funds with the goal of economic convergence.
The counter-argument about losing monetary freedom does not really make sense for the area (as it did, years before, for Denmark or the UK) because they cannot access funds in international markets when conditions are suboptimal.
These countries’ present is Eastern European, but their future is – as they dreamed in 1989 – just European. And the euro is an essential part of the deal.
