Several top-ranking government officials began making public statements about the possibility of Poland joining the euro zone in mid-December, as the country maneuvers to maintain or even increase its influence in the European Union.
The remarks indicated that the government is getting ready to intensify efforts to adopt the euro, and renewed the debate over whether Poland should do so, considering the economic difficulties in which the currency bloc is currently mired.
At a mid-December EU summit, Prime Minister Donald Tusk said that a major decision stands before Poland as to whether it wants to be part of the “heart” of Europe where the common currency is the “foundation” or whether it wants to be a “peripheral country.”
“I am determined to convince all partners in Poland, that Poland is safe in the heart of Europe,” Mr Tusk said. Finance Minister Jacek Rostowski later told media that “Poland will join the euro zone as soon as possible,” though he quickly tempered his words, adding that joining would happen “only when it will be safe and profitable for Poland.”
Roman Kuêniar, a top advisor to President Bronisław Komorwoski, chimed in as well, and was more concrete in his statements. He said that Poland would be able to adopt the common European currency as early as January 2016.
However, analysts remained skeptical as to how quickly adoption could happen. Economists at bank Citi Handlowy wrote in a statement that “given the vagueness of these comments it might be premature to assume Poland is aiming for a quick path to the euro.”
In order to adopt the euro, Poland needs to meet several macroeconomic criteria, including a low level of inflation, low long-term yields, a general government deficit below 3 percent of GDP, general government debt below 60 percent of GDP and a stable foreignexchange rate.
“Poland doesn’t meet these criteria at the moment (except for debt criterion),” the Citi Handlowy analysts wrote, “though in our view most of them could be achieved within the next two to three years if the authorities show sufficient determination.”
Nevertheless, the prime minister’s office seems to be setting the stage for an EU-wide discussion as to whether these criteria should be changed. Jan Krzysztof Bielecki, head of the prime minister’s economic council, said that the current system for euro adoption is antiquated in light of the recent economic turmoil in the bloc.
“We are dealing with a bizarre situation,” he told radio station RMF FM. “We are entering a new political system, and the entrance to the euro zone is still governed by old criteria. New conditions should be set for entry into the euro zone.”
“For 12 years Greece has been in the euro zone, and they’ve complied with these regulations for only two years,” he added.
Commenting on Mr Tusk’s earlier speech, Mr Bielecki said that the prime minister’s words sent “an important signal to our European partners – a signal that Poland is betting on Europe, that it wants to [help] build up Europe.”
Mr Bielecki said that Mr Kuêniar’s 2016 deadline may be slightly unrealistic, adding that if Poland remains relatively unscathed by the wider economic slowdown in Europe in 2013, then a realistic date for Poland to meet the requirements of entering the ERM II (pre-euro zone) mechanism would be 2014.
But even if Poland manages to meet all of the criteria, joining the euro zone will entail some tricky political maneuvering. In order to adopt euro, Poland’s constitution will have to be changed. For that, a two-thirds majority of votes is needed in the Sejm (the lower house of parliament), and an absolute majority in the upper house of parliament, the Senate.
RG, AK, JC
From Warsaw Business Journal
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