Tuesday, April 12, 2005

Falling out of Love

Reported in today's Handlesblatt comes the unsurprising news that the accession countries are beginning to question whether they really want to join the Euro zone. According to Josef Poeschl of the Vienna Institute for Comparative International Economics (WIIW), the euphoria in the new EU member states for entering the economic union has passed. The chaos surrounding EU Stability Pact was has given them plenty of pauses for thought. His point of view was backed up by the Vice President of Deutsche Bundesbank Jürgen Stark in the same paper.
Meanwhile the chief economist of Deutsche Bank, Norbert Walter, has been warning in FT Deutschland of currency crises in Eastern Europe if France says "non". He suggests that they will be hit by speculators and raises the spectre of the UK's ejection from the ERM. But their currencies are not tied to the Euro - maybe Denmark and Sweden will face a hit but not the accession countries.
The only crises that will happen are those in confidence about the Euro. The eastern countries don't have it, so where is the problem?

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