Why Wait for the Euro?

Although the EU's eastward enlargement has not yet happened, the debate is already shifting to ask what will follow: when should the new, predominantly postcommunist, members adopt the euro? Assuming that they comply with the Maastricht Treaty's provisions concerning the EMU - and are not unfairly held to more stringent criteria - the core issue is whether new members would benefit more by waiting or whether they should seek early entry.

At the outset, it must be stressed that, in seeking earlier entry into the EMU a country assumes a more ambitious fiscal and structural program than would be needed if EMU membership is delayed. Early entry, otherwise, would be an empty gesture.

I believe that early adoption of the euro is not only possible, but preferable to delay. By early adoption I mean the shortest permissible period of time - two years - following a new member subordinating its monetary policy to the fiscal and monetary constraints of the exchange rate mechanism (ERM II). Assuming entry into both the EU and ERM II in 2004, new members should aim to enter the eurozone around 2006.