The quick ingestion of commun european currency: risk or benefit, illustrated by the example of the Baltic states

The aim of this work is an analysis of the too fast ingestion of the common European currency which is illustrated on the example of Baltic states: Estonia, Lithuania and Latvia. These countries have problems with high inflation rate and current account deficit. As an introduction, there is described a historical development of European Monetary System and process of states' accession to the Exchange Rate Mechanism (ERM). Thereafter the work is focused on favourableness or unfavourableness of fixed and floating exchange rate regimes and their impact on the instruments of macroeconomic policy. Then follows an information about the actual economic situation of Baltic and the possible relation of the current account deficit and inflation rate to the fixed exchange rate. All the findings are given into the context to the Czech Republic at the end of this work