International Economics
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Dominick-Salvatore-International-Economics
(continued)
■ CASE STUDY 20-3 Maastricht Convergence Indicators Table 20.2 gives the value of four of the five Maastricht indicators for the 15 member countries of the European Union in January 1998. This infor- mation, together with the exchange rate indicator (not shown in the table) is what the European Commission used to determine which member nations were eligible to participate in the single currency. From the table we see that all countries, except Greece, satisfied the inflation, public deficit, and long-term interest indicators, but eight countries did not satisfy the public debt criterion. Furthermore, Ireland did not meet the exchange ■ TABLE 20.2. EU Members’ Maastricht Convergence Indicators, January 1998 Inflation Public Deficit a Public Debt a Long-term Rate (%) as % of GDP as % of GDP Interest Rate (%) Germany 1 .4 2 .5 61 .2 b 5 .6 France 1 .2 2 .9 58 .1 5 .5 Italy 1 .8 2 .5 118 .1 b 6 .7 United Kingdom 1 .8 0 .6 52 .3 7 .0 Austria 1 .1 2 .3 64 .7 b 5 .6 Belgium 1 .4 1 .7 118 .1 b 5 .7 Denmark 1 .9 −1.1 59 .5 6 .2 Greece 5 .2 b 2 .2 107 .7 b 9 .8 b Finland 1 .3 −0.3 53 .6 5 .9 Ireland 1 .2 −1.1 59 .5 6 .2 Luxembourg 1 .4 −1.0 7 .1 5 .6 Netherlands 1 .8 1 .6 70 .0 b 5 .5 Portugal 1 .8 2 .2 60 .0 6 .2 Spain 1 .8 2 .2 67 .4 b 6 .3 Sweden 1 .9 0 .5 74 .1 b 6 .5 EU average 1 .6 1 .9 70 .5 6 .1 Reference value 2 .7 3 .0 60 .0 7 .8 a Forecast. b Country not satisfying criteria. Source: European Commission, Convergence Report 1999 (Brussels: European Commission, 1998). rate indicator. The European Commission, how- ever, ruled that all countries (except Greece) had made sufficient progress for all to participate in the single currency. The United Kingdom, Denmark, and Sweden chose not to participate because of their unwillingness to lose complete control over their money supply and monetary policy, but they reserved the right to join later. Greece was admit- ted on January 1, 2001, Slovenia in 2007, Cyprus and Malta in 2008, Slovakia in 2009, and Estonia in 2011— thus increasing the number of members of the Eurozone countries to 17 (see Figure 20.4). Salvatore c20.tex V2 - 11/07/2012 10:10 A.M. Page 661 20.4 Optimum Currency Areas, European Monetary System, European Monetary Union 661 ■ CASE STUDY 20-3 Continued Download 7.1 Mb. Do'stlaringiz bilan baham: |
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