Abstract

Euro adoption in the Central European countries that will shortly accede to the European Union (EU) provides an opportunity to significantly boost the pace of convergence of income levels to those of existing EU countries. A key consideration in decisions on the timing of this move—that is, whether it should be an immediate policy priority or delayed until some notion of readiness is better defined—is what kinds of costs the move is likely to entail and whether waiting would reduce those costs or other vulnerabilities.