Central Europe on the Way to EMU

Poland, Hungary and the Czech Republic (CEE-3) could now be only four years away from joining the euro. Moreover, these countries seem better placed than were some of the current euro area members (Spain, Greece, Italy, Portugal) at a comparable point in time leading up to their accession to EMU. But a smooth con-vergence cannot be taken for granted. Speculative attacks occurred in the early 1990s, when the process of convergence seemed to have been successfully completed. The CEE-3 share several characteris-tics of the economies hit by speculative attacks in 1992/95: a weak external position and uncertainty about fiscal policy.