In 2004, eight countries from central and eastern Europe entered the EU; all eight countries intend to access the euro area within three to six years after entering the EU. This book presents three analytical studies that focus on selected aspects related to the countries' balance of payments and other issues that are of interest in the countries' run-up to full European Monetary Union membership. The first study assesses the countries' current account balance and the sustainability of external debt. The second study addresses the question of how to attract foreign direct investment inflows by analyzing the factors that determine these flows from industrialized countries. Since most central and eastern European countries face high public deficits and European institutions recommend expenditure-based consolidation strategies, the third study analyzes the impact of such strategies on the external balance.

Autorentext

The Author: Katja Funke obtained a diploma in business administration in 2000 and a Ph.D. in economics in 2004 from the WHU Otto Beisheim School of Management in Vallendar (Germany). After working with the European Central Bank (ECB) in Frankfurt am Main she joined the staff of the International Monetary Fund (IMF) in Washington DC.

Inhalt

Contents : Issues in central and eastern European countries' run-up to Euro area accession - Sustainability of the central and eastern European countries' external financing - Foreign direct investment flows to emerging economies - Fiscal policies and the trade account - Lessons learned for the central and eastern European countries.