The adoption of the Euro and its impact on the Maltese economy

Abstract

This study is aimed at analyzing from the Maltese perspective, the journey a country undergoes in order to form part of the euro-area and later on adopt the single currency. The first part of this dissertation deals with the economic literature and the historical milestones which eventually led to the creation of the European Monetary Union and the euro. Following this, a thorough description will be given on the challenges Malta needed to face to finally join the other euro zone members. Malta, along with the other EU member states could not adopt the euro as its new currency immediately upon membership since it first needed to show that its economy had converged with that of the euro zone. Once the desired economic and budgetary results are achieved, it will be able to adopt the single. This study will also include the benefits and losses incurred during this lengthy adoption process. In addition to this, a comparison between the different effects countries had when adopting the euro will also be made. Finally, the conclusions of the study are put forward, whilst pointing out recommendations and hinting to related future studies.