How has the financial crisis affected the fiscal convergence of Central and Eastern Europe to the Eurozone?

This article reports empirical findings on the convergence of the government debt to Gross Domestic Product (GDP) ratio of seven Central and Eastern European (CEE) member states of the European Union (EU) to the European Monetary Union (EMU) over the period 2000 to 2010. This study tests stochastic and beta convergence in a time series framework allowing for two structural breaks identified endogenously. The results help to evaluate the distortions in the fiscal convergence process of the CEE countries after the 2008 global financial crisis and the future accession possibilities of each CEE state conditional on the current levels and trends of the debt/GDP ratios.