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The objective of this article is to assess whether the recent economic evolution of EU accession countries and their expected developments for the coming years put them in a better or a worse position to join the euro. Using structural vector autoregression models, the results show that shocks are more asymmetric in candidate countries than in current euro-zone members and that the situation has worsened in the most recent years. However it seems that monetary policies in accession countries are closely influenced by monetary conditions in the euro zone. If this is the case, then the costs of losing monetary independence when joining the euro would be reduced. In any case, and considering that, on average, correlations are still far from the values of the euro-zone countries, the flexibility of real sector and labor markets will be essential for the sustainability of joining the euro. [ABSTRACT FROM AUTHOR]

One of the challenges facing regional policy in the European Union is the accession of new countries to the Single Market and to Economic and Monetary Union. Conditions in many of these East European regions are worse than in the least developed regions of the fifteen existing member states. Moreover the accession of these countries is likely to have a marked effect on the geographical distribution of economic activity in the rest of the European Union (EU). Taking this into account, this article discusses the lessons that we have learned from the latest adhesions to the EU, in order to be able to predict what will arise from the enlargement scheduled for mid-2004. In this sense, we compute specialization and concentration indexes in order to highlight the effects of enlargement on the spatial distribution of activity in the EU Additionally, inequality measures are calculated to describe the evolution of regional disparities before and after enlargement. A regional and national database for EU15 and for candidate countries with a high degree of sectoral detail from 1985 to 2001 is compiled. Analysis and some recommendations for regional policy are provided. [ABSTRACT FROM AUTHOR]

This work argues that the formation of an economic union requires that the homogeneity of domestic economic institutions and the process of regional integration reinforce each other. Granger causality tests on four cases of regional integration in the Americas, Asia and Europe (1975 through 1995) confirm our thesis. These cases include the Andean Pact, the Association of Southeast Asian Nations, the Central American Common Market and the European Union. The most successful case of integration - the European Union - does evince a pattern of positive interaction between the two variables, while less successful cases, found in Latin America, are lacking in this mechanism of mutual influence. We further discuss several regional groups that have recently emerged and use our theoretical implications to assess their future development. [ABSTRACT FROM AUTHOR]