Integrating Eastern Europe into the Global Economy : Convertibility through a Payments Union

1. Backdrop to the payments constraint -- 2. Consensual transition policies -- 3. Regional cooperation and economic reform -- 4. Backdrop to the proposal to create a payments union -- 5. Toward convertibility through a payments union -- 6. Organization -- 1. The prevailing socioeconomic situation -- 1. Problems of changing Eastern European societies -- 2. The current socioeconomic situation in Eastern Europe -- 3. The drift of the reform debate -- 4. The nature of the payments problem -- 5. Shocks of mutating trade and payment regimes -- 6. Western assistance to combat liquidity shortage -- 2. The collapse and dissolution of the CMEA -- 1. The CMEA’s demise -- 2. CMEA reform discussions -- 3. Salient obstacles to buoyant intragroup interactions -- 4. Reforming the trade and payment regimes -- 5. Balance-of-payments constraints and a payments union -- 3. Economic union in Eastern Europe -- 1. The outlook for economic union at this juncture -- 2. The desirability of economic union -- 3. Theoretical merits of a customs union -- 4. Practical problems and economic union -- 5. Linking a payments facility with an economic union -- 6. Key features of a payments union -- 4. Paths to convertibility -- 1. The global economy at Bretton Woods -- 2. On currency convertibility -- 3. Possible roads to convertibility -- 4. Western Europe’s return to convertibility -- 5. Marketization, transition, and convertibility -- 6. Toward a payments union for Eastern Europe? -- 5. Technical aspects of a payments union -- 1. Overall conceptualization of the CEPU -- 2. Payments problems and a regional payments unions -- 3. Technical issues of a payments union -- 4. A hypothetical capital fund -- 5. A payments union with the Soviet Union? -- 6. Macroeconomic surveillance and the transition -- 1. Macroeconomic responses in a payments union -- 2. Adjustment under traditional and modified planning -- 3. Standard adjustment policies and the PETs -- 4. Fund-type adjustment programs and the PETs -- 5. CEPU adjustment, commercial policy, and diplomacy -- 6. Other issues of managing a payments union -- 7. Downside risks of a CEPU -- 1. Backdrop to the debate -- 2. The rump order of priority -- 3. General arguments against payments unions -- 4. Comments on the CEPU and their merits -- 5. An evalution of the criticisms -- 8. Enlarging the European economic space -- 1. The basic preoccupations of European integration -- 2. What needs to be bridged? -- 3. On the transition to ME status -- 4. On the sequencing of reforms -- 5. Economic transition and east-west assistance -- Conclusions.