Southeastern Europe and the Euro area - The Euroization debate

Abstract

This article analyzes the theoretical and practical aspects of the unilateral euroization approach. It focuses on the degree of integration between the transition Balkan countries and the European Union (EU) and its implications for monetary and exchange rate policy. It includes an analysis that concentrates on the concept of unilateral euroization and especially the changes in the national monetary order it implies. The potential benefits and costs for the countries of Southeast Europe are discussed. A comparison is attempted between euroization and the currency board arrangement. The EU position regarding unilateral euroization by non-EU members is discussed. Attention is given to the potential paths for implementing euroization. The main findings are summarized and an attempt is made to answer the question of whether the Balkans should euroize.