Front Matter

Front Matter

Dominique Desruelle, Robert Feldman, Klaus-Stefan Enders, Karim Nashashibi, Peter Allum, Heliodoro Temprano-Arroyo, Roger Nord, and Robert Kahn
Published Date:
February 1999
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© 1998 International Monetary Fund

Production: IMF Graphics Section

Typesetting: Choon Lee

Figures: Theodore Franklin Peters, Jr.

Library of Congress Cataloging-in-Publication Data

Impact of EMU on selected non-European Union countries / R. Feldman … [et al.].

p. cm. — (Occasional paper; 174)

Includes bibliographical references.

ISBN 1–55775-778-X

1. Economic and Monetary Union. 2. Monetary unions—European Union countries. 3. Monetary policy—European Union countries. 4. European Union countries—Economic integration. I. Feldman, Robert A., 1949– . 11. Series: Occasional paper (International Monetary Fund); no. 174.

HG930.5.I48 1998




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The following symbols have been used throughout this paper:

  • … to indicate that data are not available; n.a. to indicate not applicable;

  • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;

  • – between years or months (e.g., 1994–95 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

  • / between years (e.g.. 1994/95) to indicate a crop or fiscal (financial) year.

  • n.a. to indicate that data are not applicable;

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding. The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

As of January 1999 the European Union comprised 15 countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom (EU–15). All members of the European Union except Denmark, Greece, Sweden, and the United Kingdom became members of the euro area (EU–11) on January 1,1999.


European Economic and Monetary Union (EMU) has been characterized as the most important event affecting the international monetary system since the collapse of the Bretton Woods par value system. In this context, the Executive Board of the IMF called on the staff to explore the impact of EMU in all its facets. Much of the work undertaken by the IMF focused on the repercussions of the introduction of the euro on the international monetary system, the relations of euro area members with the IMF, and the impact of EMU on IMF operations. One area, however, that had not received as much analytical attention at the IMF or elsewhere was the impact of EMU on countries outside the European Union.

In the summer of 1998, the Executive Board discussed a set of three papers prepared by the staff that focused on the likely impact of EMU on selected non-EU countries. In recognition of the contribution these papers could make to the literature and discussion of EMU, the Board requested that this collection of papers be published. This Occasional Paper presents the three papers in one volume. Chapter 1 provides an analysis of the likely impact of EMU on three regions: Central and Eastern Europe (CEE), the Mediterranean Basin (MB), and the African CFA franc zone. Chapter 2 focuses on the trade and financial effects of EMU on selected transition and Mediterranean countries. And Chapter 3 considers the possible implications of EMU for the Middle East and North African (MENA) region.

One caveat. There are limitations to the analysis, which is partial equilibrium in approach, and it does not claim to capture all of the spillover and feedback effects. The analysis does, however, offer some sense of the broad magnitudes involved and, moreover, a conceptual framework in which to assess the channels by which EMU could affect countries outside the EU.

The opinions expressed are those of the authors and should not be construed as representing the views of the authorities, Executive Directors of the IMF, or other members of the IMF staff. The authors bear sole responsibility for any factual errors. The authors are indebted to the country desk economists involved and the many IMF colleagues that provided helpful suggestions and comments. In addition, Mr. Jean-Pierre Chauffour and other staff of the European Commission provided helpful comments at a seminar in Brussels on the impact of EMU on the MENA region. Valuable research support was provided by Maha Amed, Teng-Siew Boxall, Peter Kunzel, Huyen Le, Jolanta Stefanska, and Timo Valila. Special appreciation goes to Kate Langdon for coordinating the preparation of this Occasional Paper, Janet Bungay for editorial assistance, and to Rosemary Gallen, Valda Harvey, Blanca Ochoa, and Tracey Potter for secretarial support. J.R. Morrison of the External Relations Department edited the study and coordinated its production.

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