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.

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