The ECB and Euro-Area Enlargement

October 1, 2002

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Format: Chicago

Helge Berger. The ECB and Euro-Area Enlargement, (USA: International Monetary Fund, 2002) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The likely enlargement of euro-area membership will radically change the environment under which monetary policy will be made in the euro area. Within less than a decade, the number of member countries in the euro area could more than double, with the vast majority of accession countries being relatively small in economic terms, compared with current members. Absent reforms, such a significant but asymmetric expansion could impede the effectiveness of the institutional policymaking process of the European Central Bank (ECB) and be seen by some as resulting in the overrepresentation of small member countries in the ECB Council. The paper illustrates these issues, describes the principles on which reforms of the ECB statute could build, and discusses four specific institutional reform scenarios. The analysis coincides with the ECB Council being scheduled to present suggestions for reform by late 2002.

Subject: Banking, Business cycles, Economic growth, Economic integration, Economic theory, Inflation, Monetary unions, Prices, Supply shocks

Keywords: Accession countries, Business cycle, Business cycles, Central bank governor, Eastern Europe, ECB decision-making framework, ECB decision-making process, ECB reform, ECB statute, ECB terminology, Economic and Monetary Union (EMU), Euro area, Euro area economy, European Central Bank, Inflation, Monetary policy, Monetary unions, Reaction function, Reform scenario, Stabilization effort, Structural inflation, Supply shocks, Transition countries, Unreformed ECB decision-making framework, WP

Publication Details

Pages:

55
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/175
Stock No:

WPIEA1752002
ISBN:

9781451858761
ISSN:

1018-5941

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