The right moment for entering the regional integration

Abstract

The complex of problems associated with the right momentum of the country's entry into the regional integration is investigated in the article. From the theoretical point of the view, Mundel’s optimum currency areas, various criteria must be met. Interestingly, the higher the level of fulfilment of the criteria, the greater the benefits of the integration, and the lower the costs of integration. It means that the country will be ready to join the regional integration only if it changes the structure of the economy (relying on the intra-industry trade and through technologically more intensive production process) and adapts to the competitive market, accepting a profound reform of public administration (i.e. the existence of efficient and effective institutions). Contrarily, economy will be faced with unfavourable and imposed deflationary adjustment process that will reduce GDP, rise unemployment rate and increase public debt as well as decrease wages. For the new members, the EU insists on the coordination and synchronisation of economic policies within the integration. The higher degree of integration (five degrees of integration by Balassa), the higher the coordination of economic policies within the integration. Therefore, each country should improve the economy and harmonise policies to make the adjustment process in the EU easier and cheaper. By achieving these goals, Serbia and Ukraine are to be realized greater benefits than costs in the future