Monetary Strategy for the Planned Czech Accession to the EMU
|Author:||Mgr. Jiří Mlynář|
|Year:||2003 - summer|
|Leaders:|| doc. Mgr. Tomáš Holub Ph.D.
|Work type:|| European Integration
|Awards and prizes:|
|Abstract:||This thesis deals with monetary strategy for the planned accession of the Czech Republic (CZ) to the European Economic and Monetary Union (EMU). At first, it monitors the dependency of the CZ on the European Union (EU) or the EMU and the mutual interconnection of the monetary policy. An analysis of economic policy of the relevant countries follows, which participated in the Exchange Rate Mechanism (ERM) or introduced a fixed exchange rate to euro. The Danish case illustrates a successful example, whereas Spain with Portugal and the recent Hungarian experience from the beginning of this year prove the difficulties resulting from a fixed exchange rate. The final part studies the expected economic shocks brought about by the incorporation of the CZ to the EU, the Balassa-Samuelson Effect and the relationship of nominal and real convergence, the institutional conditions and includes formulation of the monetary strategy for the ERM II and the EMU itself. The resulting strategy consists in remaining outside the ERM II, until the initial economic shocks caused by the Czech accession to the EU subside and until a fiscal consolidation takes place, and limitation of the participation in the ERM II system to the period necessary for complying with the conditions required for the EMU accession.|