EMU as a Safe Haven: Response of New Member States to the Global Crisis

The current financial and economic crisis has had a significant impact on the world economy. The region of Central Europe is not an exception - its trade ties and export dependency on Germany and France has caused a backdrop in the economic performance. While in the beginning of the crisis, it seemed that the impact on these states would not be as negative as in Western Europe, the reality has been quite different. The region of Central and Eastern Europe is a very heterogeneous one, and its differences were clear in the responses of individual countries to the crisis. However, in many cases, countries were forced to ask for assistance from international bodies, such as IMF and World Bank (with the contribution of ECB). An interesting element is added, linked to the preferences to join the Economic and Monetary Union. While in the beginning, most countries saw the EMU as a safe haven that would protect them from the crisis turmoil, their entry strategies later returned to reflect the previous preferences towards the EMU, which were not so enthusiastic. Negative reaction from the EU institutions to the tentative efforts to speed up and simplify the entry procedure to the EMU also played its role. As a consequence, EC and ECB have not played the dominant role in battling the crisis, and this role was passed to the IMF.