Polish vice PM advocates Poland to analyse Denmark's euro peg

By bne IntelliNews June 10, 2014

It would be better to be part of the euro-zone, should there be another global or European economic turmoil - otherwise, the country will be vulnerable to a number of developments that may endanger its FX reserves, according to vice-premier and minister of economy Janusz Piechocinski. Therefore, if Poland makes no clear-cut decision on taking on the euro, it should look at the solution adopted by Denmark, he said.

The Danish krone is part of the EU exchange rate mechanism ERM-II (a pre-requisite for euro-zone bidders), with its exchange rate tied to within 2.25% of the euro. However, in recent years, the Danish central bank spent considerable amount of FX reserves defending its currency on the market.

When Poland joined the European Union in 2004, it obliged itself to take on the euro, but with no time restraints.

Recently, PM Donald Tusk said that Poland has clearly dealt with the current crisis more efficiently than euro-zone member-states, hence it should not hasten its drive for the single currency. Thus, he upheld his view expressed at the beginning of this year that Poland should not hurry to the euro-zone and Poland should take on the euro in foreseeable future, but not in the near term.

 

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