Macroeconomic Adjustment in the New EU Member States

In this paper, we discuss the challenges for macro economic adjustment ahead. We begin, in section 2, by taking stock of the degree of nominal and real convergence that has already been achieved. In section 3, we turn to the development of public finance in the new member states. In section 4, we discuss the problems arising from the perspective of continued, large capital inflows. Section 5 considers the role of the ERM-2 and the problems connected with convergence towards the adoption of the Euro. Section 6 looks at the task of macro economic adjustment under EMU. Section 7 concludes.