With or without you: are central European countries ready for the euro? Bruegel Policy Contribution Issue n˚12 | October 2019

Darvas, Zsolt (2019) With or without you: are central European countries ready for the euro? Bruegel Policy Contribution Issue n˚12 | October 2019. [Policy Paper]

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Abstract

Southern European euro-area members suffered from unsustainable developments after they joined the euro in 1999 and up to 2008, and have had great difficulties since. Inadequate national policies were the main causes of these unsustainable developments, but euro membership played a role before 2008 by leading to low real interest rates (which fuelled credit booms) and by enabling complacency about potential vulnerabilities. Euro-area crisis management was also deficient in a number of ways.

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