CONSEQUENCES AND RISKS OF EURO IMPLEMENTATION AS A NATIONAL CURRENCY IN UKRAINE

Mariia LUTSYK

Abstract


Introduction. The issue of euro acceptance is a matter of constant public interest. The main problem in determining the pros and cons of euro acceptance, as the national currency in Ukraine is the difficult prognosis of long-term consequences. Certainly, acceptance a single currency will increase confidence among other European Union members and ensure equality, but it's difficult to predict how this decision will affect Ukraine's economy.

Replacing the national currency by the European currency is a huge challenge for Ukraine's economy and a topical issue in both theoretical and practical contexts, the solution of which depends on the transformation processes direction in the countries national currency systems. Scientific justification for problem-solving ways related to the euro acceptance as a single national currency are relevant in the current environment and requires new theoretical, theoretical-methodological, methodological and practical studies.

Purpose. Analysis of the consequences and risks of the euro acceptance as the single national currency in Ukraine under the terms of the Maastricht Treaty and the Lisbon Treaty in the process of joining the European Union

Results. Ukraine's joining the Economic and Monetary Union will create new opportunities for improving social well-being and will bring both benefits and threats at both macro and micro levels.

Currently, there are many arguments "for" the euro acceptance, namely: improving the financial markets integration level; banks financial security; reduction in transaction costs and currency risk; improving the macroeconomic situation; lowering interest rates and "against" the euro acceptance as a single currency: putting monetary policy into a "community" level, that will significantly reduce the ability to respond to the economic situation; the need to create reserves to help other EU countries in crisis the risk for entrepreneurs related with increased labor costs and receipt of cheap goods; expenses related to the information campaign and implementation of the euro in cash circulation; the threat of inflationary differences in the monetary union, the loss of ability to pursue independent monetary policy and others.

Originality. In the article are prognosed the economic consequences and risks of the euro implementation as the national currency in Ukraine. With the SWOT analysis there were identified the strengths and opportunities facing economic policy on the way to the Eurozone, as well as the weaknesses and threats of implementation a single Euro currency in Ukraine.

Conclusion. The Ukrainian government needs to prepare for the single currency acceptance, namely, to carry out reforms that would help accelerate real convergence towards the Eurozone.  Following steps:

1) development of a development strategy, the consistent implementation of which is aimed at increasing economic innovation;

2) reducing barriers to business. Private enterprises are the foundation of a market economy, so the more business-friendly the legal and administrative environment is, the better for national competitiveness;

3) development of social capital resource, that is, trust and capacity for cooperation among citizens. This is a difficult task, but crucial one to support the country's economic development in the future;

4) labor market reform. Reducing youth unemployment. Increasing the efficiency of employment centers. Raising the minimum wage.

Therefore, internal reforms need to be undertaken to meet the exogenous criteria foreseen for the participant of the optimal currency area, without the expectation that the euro acceptance alone will improve the competitiveness of our economy.


Keywords


euro, European Union, National currency, economy, integration.

References


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