INCLUSION OF THE EASTERN EUROPEAN TRANSITIONAL COUNTRIES INTO THE EUROPEAN MONETARY UNION

1. INTRODUCTION

The end of the 80’s and the beginning of the 90’s of the last century was the time of big changes for the countries in the Eastern and Central Europe. The change of almost 50 years of tradition started with the fall of the Berlin wall, disintegration of the Czechoslovakia and Yugoslavia, and reached its pinnacle with the fall of the Soviet Union and the so-called Iron Curtain.

This meant that these countries were exposed almost immediately to the market economy and thus faced with great problems. The consequence of being economically and politically closed and self-sufficient for almost half a century meant that these countries were less economically developed than the neighboring Western European countries. The institutions and the infrastructure for the market economy were non-existent or badly functioning. This was especially true for the financial markets and the labor, which was vastly underemployed. Another great problem that had in common all these...