Financial sector restructuring and monetary reform: precursors to European Union accession of Estonia and the Baltic States

ENFinancial sector restructuring and monetary reforms have dominated the economic scenes in the Baltic states of Estonia, Lithuania, and Latvia, as each country anticipates membership acceptance into the European Union. Policymakers in each of the transitional nations are preoccupied with managing exchange rate regimes, trade relations, banking and currency board arrangements, and foreign direct investment schemes, in adherence to EU criteria for eastward enlargement. Estonia, a first-round candidate, and Lithuania and Latvia, among the second-round candidates, each look to EU accession as a stepping-stone to further the development of their respective financial systems and economic sectors. Overall, prospects for integration of the Baltic states into the European Union appears favorable.