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The Warsaw Voice » Business » December 30, 2010
From the Business Editor
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Long Road to the Euro
December 30, 2010   
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While opening an economic conference in the Polish mountain resort of Krynica in September 2008, Prime Minister Donald Tusk said that 2011 would be a realistic date for Poland to enter the eurozone, though this deadline might be difficult to meet. It is 2011 now, but Poland still has its own currency, the zloty. And there is every indication that the situation will not change in the next few years because the government has yet to come up with an official schedule for adopting the single European currency. At the end of 2010, the euro again became a subject of public debate in Poland as the Polish president proposed draft amendments to the constitution concerning the country’s membership of the European Union. The draft included provisions that have to be adopted to enable Poland to join the eurozone. The debate on the presidential draft proved that there is no unanimity as to the date and terms of euro adoption, not even among the ruling coalition. The view that Poland should not act in haste, and that it should focus on reforming public finances for the time being, seems to prevail.

One of the reasons behind this cautious approach is that many economists believe that Poland has avoided recession largely because it is not a member of the eurozone. This opinion is shared by analysts at JP Morgan bank. They say in a report that the Polish economy partly owes its favorable performance to the flexible exchange rate of the zloty and the country’s independent central bank. Additionally, Poland has benefited from European Union funding more than other countries in the region. Despite the benefits of having a national currency, JP Morgan is convinced that euro adoption will remain a long-term strategic objective for Polish politicians, although they will not want to commit themselves to a specific date—especially as recent polls indicate that the popularity of the euro is declining among the public.

A December survey conducted by the TNS OBOP public opinion research center shows that 41 percent of respondents believe that eurozone entry would not be good for Poland. There are fewer supporters of the single currency—only 24 percent of those polled say euro adoption would be good for the country. According to 25 percent of those surveyed, replacing the zloty with the euro would be neither good nor bad for the country.

The falling confidence in the euro is not only a Polish thing. The financial crisis has proven that eurozone membership does not provide a sense of security. Public debates have started in several eurozone countries on a possible restoration of national currencies. For the time being, this seems unlikely, but who knows what the situation will be like several years from now. This explains why politicians in both Poland and other countries in the region see no reason to speed up the process of adopting the euro.

Andrzej Ratajczyk
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