Challenges for nominal and real convergence

This article addresses the issue of macroeconomic policies in the pre-accession period. The key theme is an assessment of the relationship between the real and nominal convergence of the candidate countries towards the EU. Support for real convergence cannot proceed on a long-term basis in contradiction to the nominal convergence criteria. Despite a renewal of growth in 1999, a whole range of persisting structural problems, chiefly in the fiscal area, confirm the benefit of

Keywords: inflation targeting, Balassa-Samuelson effect, price level, accession process, policy mix, nominal and real convergence, one price law