Problems and Prospects of the Single Financial Market and the Common Currency of the EAEU

The EAEU Treaty assumes that by 2025 the community countries will complete the construction of a single financial market and will be able to move to supranational regulation. This will increase the overall competitiveness and attractiveness of small markets, optimize processes and cooperation. The article examines the existing obstacles and incentives for the formation of a single financial market, substantiates the thesis about the limits of minimizing transaction costs and the possibility of negative effects of the de-dollarization policy in the EAEU space for mutual trade in the existing economic conditions. From the position of the theory of optimal currency areas, the importance of the transition to a single currency for the development of the economies of the EAEU member states is justified.

Waluty krajowe czy wspólnotowe? Oto jest pytanie!

What currency system is conducive to economic development? Economists from various economics schools are trying to answer this question.Different opinions of economists advocating the existence of a global currency as well as those who believe that there should be competition between currencies and the associated ‘free banking’ have been presented. The problems associated with the concept of optimal currency areas are also discussed. The last section discusses the controversy surrounding the question: “monetary commun-ities or national currencies?”.

From Monetary to Fiscal to Political Union: A Progression to Integration or a Recipe for Failure?

In this paper, we discuss the limits of the architecture of the euro from an economic point of view. We first highlight how the choice to create a monetary union was not supported by the accepted theory of optimal currency areas, and how its institutional set-up responded to a special and questionable view of the functioning of the economy, which recognized only a limited role to active macroeconomic policies. We continue by reconstructing the reasons for the emergence of the 2010–2011 debt crisis that can be traced back to the dynamics triggered by the single currency itself, and we highlight the role played by structural differences between various models of capitalism. Finally, we argue that the proposals currently on the table are by no means sufficient to correct the flaws in the European monetary architecture. The prospects are therefore pessimistic about the possibility of monetary union evolving towards a fiscal and political union.

Assessing PIIGS Country Performance against Themselves and the EU

This study reviews research and provides discussions on various aspects of optimal currency areas, the link between debt and growth rates, and government debt levels for the PIIGS countries which consist of Portugal, Ireland, Italy, Greece, and Spain. Ten years after the Great Financial Crisis (GFC), and five years after 2013, the year of peak debt levels to GDP for the PIIGS countries and the year of the lowest real GDP levels between 2011 and 2018 for the PIIGS countries, this study provides an assessment of PIIGS country performance relative to each other and to the EU. The study time frame includes the years 2013 and 2018 using twelve measurements grouped into four sections which provide insight into the economic performance of the PIIGS countries. The sections are Trade Flows, Industry / Debt / Foreign Direct Investment (FDI), Demographics, and Economic Outcomes. Based on a summary analysis of the measurements, the overall ranking is: Ireland, followed by the EU, Spain, Portugal, Italy then Greece.

A Search for an Optimum Currency Area

Economic and monetary integration is the result of unifying efforts that have become a major driving force in post-war Europe. Although some of the initial initiatives, the Monetary Union project has many times been on the brink of interest. It can be as the surprise that Europe has managed to implement the common currency so soon and relatively smoothly. Nevertheless, even after its launch, this project has never completely abandoned criticism and discussion of the legitimacy and meaningfulness of its existence. Critical attitudes to the introduction of the common currency in the European Union are based above all on the Optimum Currency Area theories. The theoretical concept of optimal currency areas is currently considered a standard tool for assessing monetary integration efforts in Europe. OCA criteria are used to estimate the readiness of the candidate countries to adopt the euro, while the convergence processes are linked to the decision on the euro adoption timeline. The aim of our research article is, therefore, to closely analyze the issue of monetary policies and optimal currency areas in the context of convergence efforts towards more closely integrated economic and monetary unions.