Poland still fulfils two convergence criteria required for euro-zone in May

By bne IntelliNews July 7, 2014

Poland continued to fulfil two convergence criteria required of bidders for the euro-zone in May of 2014, the ministry of finance said in its monthly Nominal Convergence Monitor. Poland has continued to fulfil these two criteria for over a year now.

The first of these criteria was the price stability criterion: Poland's average 12-month HICP inflation was 0.6% (unchanged m/m) vs. the reference value of 1.5% (this value was down by 0.2pps on the month).

The ministry stresses that the European Commission's forecasts stipulate that Poland will fulfil this criterion throughout the entire forecasting period, i.e. till Q4 of 2015.

The other criterion that continues to be fulfilled is the long-term interest rates criterion: the average interest rate for the last 12 months in Poland was 4.3% (up by 0.1pps m/m), i.e. only slightly above the historically lowest level of 3.9%. At the same time, it was at a level by 2.2pps lower than the reference value (vs. 2.0pps a month before), the ministry said.

The fiscal criteria remain unfulfilled as Poland is still under the excessive deficit procedure. However, the ministry notes that the European Commission's newest forecasts suggest that Poland will manage to fulfil the fiscal criterion in 2016 (on the basis of 2015 data).

The country does not fulfil the FX criterion as it has not entered exchange rate mechanism ERM2 yet.

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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