Current-Account Matters on the Way to EMU: The Transfer Problem Re-revisited

Concerning recommendations for early Euro adoption in EU accession countries from Central and Eastern Europe we address potential trade-offs between real and nominal convergence from a novel perspective. Specifically, we discuss the modern transfer problem as a trigger of sudden stops and bring up the concept of current-account sustainability as an approach complementary to the appraisement of stabilizing central parities and conversion rates. From a policy perspective a non-structural case-study approach seems preferable including (1) an assessment of numerical sustainability benchmarks and (2) an analysis of the sources and ef¬fects of actual current-account deficits. Clearly, this amends OCA criteria with intertemporal cost-benefit considerations.