BALTIC STATES IN THE EUROZONE: THE ACCESSION PROCESS AND RESULTS

Abstract

The article analyses the process of the Baltic states’ accession to the eurozone and examines the consequences of their adoption of the euro currency. Although Estonia, Latvia and Lithuania joined the eurozone in different years, they share a number of common features in terms of both their accession process and presence in the euro area. The article consists of three parts – the first surveys the Baltic states’ conformity with the convergence criteria and the second examines the effects that can be observed in the economies of the three Baltic countries after accession. The third part contains a comparative analysis of actual inflation versus perceived inflation index seen over the three years spanning the periods before, during and after the adoption of the euro. For this purpose, calculations of simplified perceived inflation indices in the Baltic States were compiled and compared against actual inflation. The differences across the Baltic states between the perceived inflation index and real inflation were similar to those in Austria and Germany during these countries’ accession to the euro zone.

Keywords

• convergence
• euro zone
• perceived inflation
• Baltic countries