Europe.view: Time to change the rules
The EU is asking too much of the ex-communist states that want to join the euroMOST people who give the matter any thought agree: one of the main rules for countries wanting to join the euro is perverse. Yet adopting the common currency has gone from seeming a matter of national pride to national necessity, as the financial turmoil has highlighted the costs and risks that small countries face by keeping their national currencies. For places like the Baltic states and Bulgaria (which already peg their currencies to the euro) maintaining the current regime carries extra burdens and no benefits. But euro-adopters must meet a European Union (EU) rule that stipulates a “high degree of price stability”, meaning that inflation must be no more than 1.5 percentage points higher than the three best-performing countries. (The other rules are less controversial. The second is sound public finances, meaning a government deficit below 3% of GDP and government debt below 60%. The third is stable exchange rates and the fourth is low long-term interest rates.) ...
