The rocky path to the Euro (TT Sept03 p9-11)

Over recent years the local bond markets of the European Union (EU) accession countries from central and eastern Europe have been driven by convergence. Gradual adjustment of inflation and interest rates to Euroland rates and capital inflows have temporarily led major bond rallies in these markets. However, as things stand, instead of the convergence process becoming more predictable and straightforward in its final stage, it has brought a number of problems to the fore.