Problems and Prospects of Ukraine's Accession to the European Monetary Union

Abstract

The main purpose of the article is the study of current issues of monetary integration of Ukraine into the European Monetary Union. Since Ukraine became a candidate country for joining the European Union on June 23, 2022, a detailed study of the prospects for currency integration has become an extremely urgent issue. This study reveals the main theoretical approaches to the interpretation of the concept of "currency union"; examines the elements on which the European Monetary Union is built; factors affecting integration; and identifies the main problems that block the currency integration of Ukraine, namely the incomplete legal framework and currency exchange rate policy. In the light of these problems, we analyzed the changes that took place in the currency market of Ukraine from the beginning of independence to the beginning of a full-scale war. It is worth noting that every year Ukraine took a number of steps that clearly brought us closer to European standards, but with the beginning of Russia's invasion of the territory of Ukraine, the situation changed significantly: the currency policy changed from liberalization to strict restrictions and control. Such changes were provoked by the beginning of the war and are of a forced nature, because without their introduction it would not be possible to maintain the functioning of the Ukrainian economy at an acceptable level sufficient to ensure the activities of individuals and legal entities, as well as the state's performance of its direct functions, especially the defense function. At the same time, Ukraine continues to strive for integration with the EU, although this is not an easy task in the conditions of martial law. However, it is worth noting that the currency integration of Ukraine with the European Monetary Union is quite promising, at the same time very long-term since this kind of integration takes place only at the highest level of harmonization of currency policies. At the same time, the positive effect for Ukraine consists in ensuring the achievement of both economic and social growth. Also, rapprochement with the EU will help Ukraine to pass the period of post-war reconstruction of the Ukrainian economy and the state more easily in general. Hypothesis. We assumed that with the start of the war, in the short term, the chances of Ukraine joining the European Monetary System would decrease, but in the long term, on the contrary, they would increase. Research methodology. The basis of this scientific research is the work of domestic and foreign scientists who studied the European currency system. At the same time, we used three main methods: analysis, synthesis and systematization. The analysis and systematization made it possible to single out the factors that will contribute to Ukraine's successful accession to the European Monetary Union. The use of a logical method and a systematic approach helped to analyze and summarize the situation on the foreign exchange market of Ukraine, as well as to make generalized recommendations for improving the situation on this market. Findings. This study made it possible to assume that Ukraine's accession to the European Monetary Union is possible, but only in the long term. At the same time, it is worth noting that such integration will have a positive impact on the economy of Ukraine.