First, it should, through its positive medium and long-run impact on euro area growth, boost demand for imports from Central and Eastern European countries, and thus spur growth. The creation of a zone of stability in Europe should undoubtedly have positive spillover effects on the Central and Eastern European countries BIS Review 41/1999  6  closely associated with the European Union.
Second, euro area interest and exchange rate developments will be critical determinants of the external economic environment of Central and Eastern European countries. The decline of long-term interest rates in Western Europe will reduce the interest servicing costs of CEECs which hold sizeable foreign debt denominated in Western European currencies or which intend to tap the euro credit and bond markets.