Exchange Rate Convergence and the Entrance to Eurozone (II)

The article features a general analysis of the exchange rate convergence process for EU- and eurozone-candidate countries. Emphasis is firstly given to an analysis of the exchange rate policies of member states within the European Monetary System’s former (ERM) and new (effective 1999, ERM2) exchange rate mechanism during a several-year period before the introduction of the euro, and to an evaluation of the European Monetary Union’s exchange-rate criteria. The second part of the paper features a discussion of ERM and ERM2, and the third part features a detailed analysis of the exchange rate convergence process in EU countries. The final part of the paper summarises the exchange rate convergence experiences of EU/eurozone countries as regards ERM and ERM2.