Not every country in the EU is in the Eurozone. Given that the Single Market prevents EU countries from slapping each other with tariffs (Trump style), what prevents the countries in the EU but not in the Eurozone (e.g. Poland) from trying to devalue their currency and thus gain an (even short lived) economic advantage, especially over their Eurozone neighbors?

(On a broader international level, the IMF charter prohibits this, which doesn't mean it's not happening to some extent, worldwide.)


1 Answer 1


As far as I understand this (so I'm open to better answers), substantial currency devaluation (e.g. by lowering central bank's interest rate or by the more recently used quantitative easing) results in a substantial increase in inflation. And the Maastricht criteria sets limits to inflation in EU member countries (not just the Eurozone).

No more than 1.5 percentage points higher than the average of the three best performing (lowest inflation) member states of the EU.

I'm guessing an EU country that flounts this would ultimate open itself to an infringement procedure, although I'm not aware of examples where EU countries were threatened with this over inflation.

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