E Europe: Global financial crisis alters EMU challenges
Overview:
In the years leading up to the global financial crisis, the most challenging of the Maastricht criteria for joining EMU was that regarding inflation. Fast growing economies struggled to get inflation down to the demandingly low levels required. Now, with growth contracting and budget positions deteriorating, meeting the fiscal deficit target of 3% of GDP is the main problem. The timetable for new entrants joining EMU has slipped as a result of the crisis with a few notable exceptions like Estonia. Bulgaria might also use its strong fiscal outcomes to enter ERMII. The financial crisis and the currency volatility that has accompanied it have strengthened the desire of many countries to accelerate adoption of the Euro. However, the travails of the Club Med countries demonstrate the challenges EMU membership also poses.