ABSTRACT
The European integration process, in particular the experience of those peripheral countries in Europe, has attracted the interest of Latin America countries. Integration, encompassing trade and capital openness, has been seen in Latin America and in the European periphery as a recipe for growth and real convergence with the more developed countries. The reduction in macro imbalances, especially on the price stability and fiscal fronts, enjoyed a conclusive boost in the second half of the 1990s. In Latin America the headway has been remarkable in price stability. The European periphery experience shows that the process of real convergence is not necessarily sustained. It accelerated around the entry dates due to the beneficial effects of the opening up of the economy, but it suffered setbacks. Economic and monetary union has been designed as an area of macroeconomic stability, in the sense that the entry conditions and the institutional set-up are geared towards avoiding macroeconomic imbalances.
