Last modified: 2023-05-03
Abstract
The notion of economic integration has been widely discussed in Europe ever since The Treaty of Rome. However, only the minimum nominal convergence criteria have been regulated thus far. This raises two significant questions: how can aspiring countries to EMU improve their levels of convergence and how can this level be optimally quantified? Determining the optimal moment for joining the EMU is closely related to the analysis of the level of convergence between EU member states and eurozone member states. We need to observe whether the catching-up phenomenon is more intense inside or outside the union, and to determine whether the accession of the aspiring state represents an economic danger for the union and for the state itself. For this reason, we have proposed a classification of EU member states based on their level of convergence, and we considered it necessary to create a convergence index (GCI) that considers nominal, real, and social aspects that have a great impact on economic growth. To evaluate the convergence potential of European countries, it was imperative to assess the impact of each selected indicator on the convergence index, rank the countries, and compare the outcomes obtained using four distinct techniques. To accomplish this, we employed the following multi-criteria data analysis methods: principal component analysis (PCA), analytic hierarchy process (AHP), the critical method for weight determination, and the entropy method for weight determination. According to our ranking, Romania has a low convergence potential. Although the general level of convergence of a country is not a precondition for joining the euro area, its development and expansion depend on and are conditioned by the elimination of disparities among member states.
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