The Mirage of the Euro Adoption for the New Member States from Central and Eastern Europe

Convergence has become a topic of great importance with the establishment and the subsequent stages of enlargement of the European Union. Although until the beginning of the 21st century, both academic environment members and decision makers were interested to study mainly the nominal convergence criteria, they recently become more and more interested in the other facets of the process. An important determinant of the new paradigm shift of the European integration process was the accession of the countries from Central and Eastern Europe, which recorded lower economic performances comparing to the Community's average. The main purpose of this paper is to study the real convergence within the European Union and the impact of the evolutions in the Euro area on the economies of the New Member States. In this respect, we have tested the beta- and sigma-convergence in terms of GDP, labor productivity and compensation of employees for the New Member States, trying to respond to some questions, the most important being if entering into the Eurozone can guarantee better economic performances. Overall, we did not find evidences that Eurozone membership have a decisive impact on the economic welfare of the Member States. This conclusion may be relevant for the European decision-makers as other countries from Central and Eastern Europe, apart from after Slovenia, Slovakia and the Baltic States are taking important steps in order to adopt the single currency.