The evolution of east-west trade and the role of the Ecu in Eastern Europe

Conclusion This paper arrives at the conclusion that the expanding European Community is a dominant attraction for Eastern Europe, including the former USSR. Since the Community will have privileged trade arrangements with most, if not all, of Eastern Europe, optimal monetary solutions will be strongly influenced by trade relations. The future Western European currency therefore, is also playing a dominant role in the monetary choices of Eastern Europe. We have discussed several aspects of this choice (anchor of the exchange rate regime, management of foreign reserves, parallel currency and currency of a possible payments union) and conclude that the Ecu is the dominant contender.Opinions expressed in this paper are strictly personal.