Joined: Jan 2008 Gender: Male Posts: 11,454 Location: Krak`s Town, Lesser Poland
Euro currency in Poland « Thread Started on Nov 15, 2010, 8:52pm »
Not so fast...
Mike, it seems that when you opposed the introduction of euro into Poland, you were Polish vox populi in a way. Good for you!
Waning Europhoria? Christian Pollok | 3rd June 2010
Poland backs down from quick eurozone entry
In 2008, when the Polish Ministry of Finance published the “Roadmap for the Introduction of the Euro in 2012”, it seemed that it was a top priority to become a member of the European Monetary Union (EMU) as fast as possible. Just two years later the euphoria amongst Polish politicians about joining the eurozone seems to have evaporated. In the summer of 2009, the accession plans were extended to 2015. As Prime Minister Donald Tusk made clear during a press conference at the beginning of May, the schedule for Poland’s entry to the euro area is no longer a priority for his government at the moment.
The national economic crisis in Greece and the initial perplexity of the EU government and Member States on how to curtail the risks of contagion exposed the fragility of the common monetary system, as well as the lack of efficient control mechanisms. For Poland’s finance minister, Jacek Rostowski, the European currency crunch is the decisive reason for slowing down the convergence process. “The eurozone is like a house that needs reinforcement, fixing and repainting,” he said in an interview with Radio Zet.
In fact, the way the monetary union was set up has been flawed and fragile right from its beginning in January 1999. The biggest problem of the EMU, as economists pointed out, was that national currencies had been united, while fiscal policies largely remained uncoordinated. Despite the Stability and Growth Pact and its strict convergence criteria for member countries, there are still no mechanisms of enforcement. Neither is the European Central Bank (ECB) officially authorised to directly bail out an indebted member, nor is there a possibility for countries with excessive debt to drop out of the EMU. Even though the European currency has been a success story within its first decade of existence and seemed to have proven its critics wrong, the current crisis in Greece demonstrates that the monetary union lacks fiscal coordination.
As the Greek tragedy reaches its bitter climax, the Polish government has its hands full in keeping the złoty and the national economy as stable as possible. At the beginning of May the Polish currency lost two percent against the U.S. dollar, as it is linked to the troubled euro, against which the złoty lost one percent. This led to the weak level of the Polish złoty for the last three months. The depreciation of the Polish currency resulted from concerns that investors might sell their emerging market assets. When the EU implemented the 110 billion euro aid package to tackle Greece’s shaken economy, the złoty recovered from its recent downswing.
Despite being the only country that managed to avoid a fall into recession as a consequence of the economic crisis, Poland’s currency is considered to be too volatile and the national economy to be too risky for attractive investment. That is why the Polish government urged the country’s reluctant National Bank to extend the expiring flexible credit line of $20.5 billion, as granted last year by the IMF to deal with the financial crisis. Though Poland never had to draw on the credit line, it is nevertheless considered to be an insurance policy against the debt crisis of the euro and its destabilising effects on the Polish economy.
The reason, however, for allowing Poland’s entry date to stretch on ad infinitum is twofold. Apart from the pan-European currency trouble, it is the shape of Poland’s economy that renders impossible any ascertainment of joining the eurozone. Already in 2009, when Poland was still convinced about its roadmap for 2012, the European Commission imposed an excessive deficit procedure that prohibited the country from joining the European Exchange Rate Mechanism II (ERM II) as long as the convergence criteria were not met. Even though Poland complied with the interest rate criteria, as well as the ratio of gross government debt to GDP, both the inflation rate and the annual government deficit exceeded the prescribed threshold values. Thus, the entry requirements to the ERM II are considered to be a harsh obligation for Poland, as was stated by the Ministry of Finance at the beginning of this year.
In the light of the current situation, the questions about Poland’s entry into the eurozone centre on when and how. At the moment, Poland does not comply with any of the demanded convergence criteria of the Maastricht Treaty. Hence as long as the government spends more money than it earns, as prices stay volatile and the currency remains unstable against the euro, the Central European country needs to find a means to create an effective action plan that fixes and repaints its own national home first, before being able to become a full-fledged resident of the European monetary neighbourhood.
Joined: Mar 2008 Gender: Male Posts: 4,434 Location: Valparaiso, Indiana USA
Re: Euro currency in Poland « Reply #2 on Nov 16, 2010, 12:12am »
Now belive me, the USA will be much better after this president is out of office, the end of this term. He could never get re-elected again, even as dog cather.
Joined: Jan 2008 Gender: Male Posts: 11,454 Location: Krak`s Town, Lesser Poland
Re: Euro currency in Poland « Reply #3 on Dec 18, 2010, 9:56pm »
Slowly, gradually..... euro is creeping in as if through the back door....
Parliament debates changes to constitution 15.12.2010 14:18
MPs are debating changes in Poland’s constitution, including making provisions enabling the adoption of the European single currency.
The changes to the constitution, as proposed by President Bronislaw Komorowski would dovetail Poland’s law to EU norms and principles, while ensuring the supremacy of the Polish law over international regulations.
The package includes regulations which will come in force after Poland joins the euro zone and speak, among other things, of a re-organization of the National Bank of Poland and the scrapping of the interest rate setting Monetary Policy Council.
Earlier today, President Komorowski met with parliamentary party leaders.
Leader of the ruling Civic Platform (PO) parliamentary group Tomasz Tomczykiewicz says the changes should be adopted before the end of the current parliamentary term.
“All [parliamentary party heads] agree that this is an important presidential initiative, which they will study closely,” he told Polish Radio. “There will surely be some minor amendments but generally all parties want this work to continue and to include rules on relations between Poland and the EU in the Constitution.”
The Democratic Left Alliance (SLD) leader Grzegorz Napieralski also welcomed the proposed changes to the constitution.
“I believe that we should prepare a legal and political framework, because changing this later with haste is the worst thing that could happen and is unnecessary.”
Law and Justice (PiS) parliamentary party leader Mariusz Blaszczak recalled that his party came up with its own draft bill and criticized the president for concentrating on the adoption of the euro in Poland, which he claims have weakened economies, not strengthened them.
“Experience has taught us that countries which entered the so-called European Currency Snake [a stage which proceeded the introduction of the ERM and eventual adoption of the euro] have been much harder hit by the crisis than countries which are outside the euro zone,” he said.
Joined: May 2008 Gender: Male Posts: 2,813 Location: Warszawa
Poland too strong for euro club « Reply #4 on Feb 1, 2011, 11:38am »
//Poland too strong for euro club
In the third quarter of 2010 the Polish economy grew 4.2 percent in comparison with the same period last year, making Poland the most healthy economy in Eastern Europe.
The flexible exchange rate of the Polish currency has contributed to this growth, which is why Warsaw is rejecting the idea of converting to the euro at present, the business paper Il Sole 24 Ore writes:
“Poland is in no hurry. With undisguised satisfaction Warsaw points out that only two years ago the Western Europeans were telling Poland, which they saw as a needy relative, to be patient.
… The devaluation of the zloty helped to boost growth. … The stability of the economy is underpinned by strict norms, while the high efficiency of the work force and low production costs have enabled the country to weather the crisis better than other countries.
… Yet on 26 May 2005 the French rejected the European constitution for fear of an invasion by the dreaded ‘Polish plumbers’, with the Dutch following suit a week later. Who would have thought that only five years later Eastern Europe would be giving the euro club the cold shoulder?//
Joined: May 2008 Gender: Male Posts: 2,813 Location: Warszawa
Kaczyński: Postpone euro for 20 y. « Reply #5 on Feb 2, 2011, 10:41am »
I think it would be a grave mistake to postpone Euro cuurency adoption for such a long period of time. It will cut Poland off from the stabilizing effect of the prospect of adopting euro curency. Kaczynski seems to want to politically play on the rising reluctance to euro currency among the Poles, not for the good of Polish economy
//Kaczyński: Poland should postpone euro adoption for two decades
1st February 2011 Jarosław Kaczyński, the leader of Poland's main opposition party, was quoted as saying that Poland should delay adopting the euro for at least 20 years because of the problems which currently burden the euro zone.
TVN 24 reported him as telling a conference on Monday that the złoty should serve as “at least the third currency in our part of Europe, after the euro and the dollar.”
He went on to say that the global financial system has “fallen, and it is not our job to build it again.”
Poland's current government has been forced to ditch plans to adopt the common currency in 2012 because of the global financial crisis. It nevertheless want to resume its efforts at switching currencies when the euro zone has recovered from its sovereign debt crisis. (GP)//
Joined: Jan 2008 Gender: Male Posts: 11,454 Location: Krak`s Town, Lesser Poland
Re: Poland too strong for euro club « Reply #7 on May 12, 2011, 9:24pm »
Poles sceptical of euro entry, poll reveals 11.05.2011 08:40 A recent survey undertaken by the Warsaw School of Economics shows that 42 percent of Poles are against the adoption of the euro.
However, support for euro entry amounted to less than 41 percent, according to the report penned by the School’s Institute for Economic Development.
“For the first time in a long while we have observed a higher number of sceptics than supporters of the euro,” Piotr Bialowolski from the Warsaw School of Economics said on Tuesday, when the report was released.
Currently, 41.7 percent of respondents are against entry into the eurozone, an increase by 3.3 percent on last year. Meanwhile, the number of the euro’s supporters has dropped from 42.2 percent of respondents to 40.8 percent.
The Institute of Economic Develeopment at the Warsaw School of Economics has been asking the Polish public about euro entry since 2006. “Currently [Poles] have a very low opinion on the issue,” Bialowolski said.
However, as many as 17.5 percent of respondents still did not have a clear opinon on whether Poland should join the euro or not.
Keep the money you now use, or all Polish will suffer.
Mike
Yes, Mike, I didn`t believe you at first but now I see your scepticism was well grounded in a way.
Poland should hold off euro adoption for several years - NBP head
Marek Belka Poland should hold off euro zone entry for a few years, as long as the monetary union is undergoing a revamp, considering the threats euro adoption entails, central bank NBP president Marek Belka said during a conference on Friday.
"It's not worth it to push for an entry, when the euro zone is undergoing a revamp," Belka said. "Let the euro zone first decide on its functioning and then we will make a decision. For now it's not worth to push for entry for a few years."
"Today we are looking more soberly on Poland joining the euro zone," Belka said. "Today we already know well that entering the euro zone might have negative effects. Entering the euro zone brings a threat of triggering an unsustainable 'boom' period, which can later transform into a 'bust' period."
Poland will certainly not adopt the euro before meeting the Maastricht criteria, he also said.
http://www.washingtontimes.com/news/2012/mar/22/polands-dilemma/ Poles have watched the fall of Greece. They wisely have not spent profligately and do not have either the welfare state or the debt that Greece has. Now, they don’t want the euro. Luckily, Poles still have a few years to find a way out of their dilemma. In the interim, they should ignore all claims that the European crisis is under control because it isn’t just the debt that’s the problem. It’s also the euro currency.
Joined: Jan 2008 Gender: Male Posts: 11,454 Location: Krak`s Town, Lesser Poland
Re: Poland too strong for euro club « Reply #9 on Feb 20, 2013, 9:18am »
The ruling party calls for a serious debate over the adoption of euro currency in near future.
Poland should adopt the euro as soon as possible but will make the move only when “it is 100 percent ready”, Prime Minister Donald Tusk said Tuesday in kicking off a euro adoption debate in the Polish Parliament. "We will proceed as best as we can to have Poland fulfill the member requirements as fast as possible," Tusk said. A decision to take up the euro, in turn, must be calm, safe and built on a necessary domestic consensus, he added. The 17-nation euro area needs to resolve internal problems and Poland, a country of 38 million, must be fully prepared before it scraps the zloty in favor of Europe’s single currency, Tusk said. “Our road to the euro area should be clear-cut and the decision must be 100 percent safe for Poland,” Tusk said. "The decision should come when the euro zone will be ready for it . . . but especially when Poland will be 100% ready for a safe euro-zone entry," Tusk said.
Experts warn of consequences According to Andrzej Sławiński, director of the Economic Institute of the National Bank of Poland, premature eurozone entry could be risky to the stability of the Polish economy. “The rate at which productivity has grown in the Polish economy was, is and will be—for quite some time—higher than in more affluent countries,” Sławiński said. “Therefore, the natural interest rate level, one that helps maintain an equilibrium in the economy (...), is higher in Poland than in the eurozone. So too quick an entry into the eurozone would permanently stabilize the interest rate at a level lower than that needed for balancing the economy. This could carry the risk of destabilizing the economy. On the other hand, the variable rate has proved to be a very effective way to keep the real, effective exchange rate at a stable level. So this is a good thing for business.”
Re: Poland too strong for euro club « Reply #10 on Feb 21, 2013, 9:44am »
I have to agree with Mikes old message. Entering the Euro to soon or in the present situation might bring Poland in a Slovak situation. The Slovak economy suffered from a too quick entry of the Eurozone. The Zloty isn't that bad. Look at the Danish Krone and the British pound. Are these countries doing bad? I don't think so. I agree with Donald Tusk and Andrzej Sławiński too.
I have to agree with Mikes old message. Entering the Euro to soon or in the present situation might bring Poland in a Slovak situation. The Slovak economy suffered from a too quick entry of the Eurozone. The Zloty isn't that bad. Look at the Danish Krone and the British pound. Are these countries doing bad? I don't think so. I agree with Donald Tusk and Andrzej Sławiński too.
But Slovaks have noted a nice increase in GDP after initial fall.
4.02.2013 13:10 Foreign Minister Radoslaw Sikorski said on a visit to Riga on Wednesday that he is envious of Latvia's forthcoming adoption of the euro.
Polish Foreign Minister Radoslaw Sikorski (L) with Latvian Foreign Minister Edgars Rinkevics (R): photo - EPA/Valda Kalnina
“I look with a certain degree of envy on the fact that Latvia has fulfilled the economic criteria necessary to enter the eurozone,” he said at a joint press conference held with his Latvian counterpart Edgars Rinkevics, as cited by the Polish Press Agency (PAP).
“We are keeping our fingers crossed for you,” he said of Latvia's plans to adopt the euro in 2014
Re: Poland too strong for euro club « Reply #12 on Feb 23, 2013, 11:43pm »
Bo,
That is very good news for Poland too. Yu have to be greatful and wish the best for your neighbours from a humane and altruistic point of view and secondly for your own sake. A prosporous Slovakia, Latvia, Luthuania and Ukraine are good for Poland, because Poland can export to these neighbours.
Poland is important to these neighbours too, because it can be a great market for Slovak and Baltic products too. Every nation has something to offer. And some products and local/regional qualities can be beneficial for neighbours. Has Poland any border crossing Euregions?
The Polish geographic situation is makes the internal market stronger. The shape of the country is of a round square, and in that Polish area their are a lot of Cities, towns and Urban agglomerations like Greater Warsaw. Poland with it's strong internal market and export position maybe doesn't need Eurregions together with Slovakia, Germany, Urkaine or the Baltic states.
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