NBP's Belka: Poland in no hurry to take on euro due to euro-zone's uncertainties

By bne IntelliNews April 28, 2014

As long as the euro-zone's future is unclear, the pace of taking on the common currency is weaker, governor of the National Bank of Poland (NBP) Marek Belka said during a lecture in Washington. Until the zone is cures, joining it would mean that Poland needs to take part in schemed aimed at helping euro-zone's ailing member-states, he argued.
Also, one cannot be sure whether the euro-zone entry would not be followed by "a sudden deflation disease or low inflation," the central banker added.
Belka went on to say that prior to taking on the euro, Poland should further improve its competitiveness level. It has already been competitive in terms of los costs and wages, but it lacks "structural competitiveness, i.e. the competitiveness of Switzerland." He added that there is a threat that the two-year period of tying up of the zloty within the currency mechanism ERM II could lead to a similar situation as was the case of Slovakia - and it could wipe away Poland's costs-based competitive edge.
Belka concluded that his advice as an economist is not to be in a hurry with joining the euro-zone.
Last month, Belka said that the current crisis in Ukraine shows that it is worthwhile to additionally invest in the European Union and possibly also have another look at the question of Poland's joining the euro-zone. Earlier, Belka he has long been arguing that Poland should not join the euro-zone in the foreseeable future, especially as he sees this move's pre-requisite - ERM II - as dangerous.
When Poland joined the European Union in 2004, it obliged itself to take on the euro, but with no time restraints.

Related Articles

Protests against judiciary reform continue to rock Poland

Polish protests against the government's judiciary reforms continued for a sixth day on July 23, as crowds sought to add to pressure on President Andrzej Duda to veto the controversial bills that ... more

Czech judiciary denounces Poland's move to end separation of powers

Senior Czech judges on July 21 denounced Poland's judicial overhaul as an attack on the rule of law. With big street protests in the Czech Republic's neighbour seemingly gathering momentum – 120 ... more

Strongly profitable Czech petrochemical maker Unipetrol puts cracker explosion behind it

Unipetrol looks to have finally got over the August 2015 fire and explosion that wrecked its steam cracker, an indispensable installation in the production of ethylene feedstock needed to manufacture ... more