Polish government reportedly ready to agree to euro referendum

By bne IntelliNews March 26, 2013

bne -

Poland's ruling Civic Platform (PO) is ready to accept a demand from the main opposition to hold a national referendum on accession to the Eurozone, claims local media. In return, should the vote prove positive, the main opposition Law and Justice (PiS) party will back the necessary changes to the constitution to introduce the single currency.

Although Prime Minister Donald Tusk's coalition government - led by his PO party - has said it won't seek to push through joining the euro ahead of elections in 2015, officials have regularly reminded the country that in order to secure a place at the top EU table, Poland must not delay too long. However, needing to amend the exclusive power handed to the National Bank of Poland to print money and plan and implement currency policy, PO is penned in by conservative forces hostile to its liberal agenda, both from across the lower house and within its own ranks.

Hence, the tactic is slow and steady. In late February, President Bronislaw Komorowski said Poland should first fulfill the Maastricht criteria on interest rates, debt levels and inflation before taking a political decision on joining the Eurozone. That, he said, is unlikely before elections in 2015 - therefore, 2017 looks the likely earliest date for Poland to adopt the euro.

Gazeta Wyborcza reported on March 25 that the PO is now ready to agree to PiS demands for a referendum. However, with recent polls suggesting around 60% of Poles are against the idea, the likelihood of that happening anytime soon is low. "PO expects that a battle to win the referendum will be easier than changing the constitution without PiS," explains the daily.

Worried by the prospect of being left aside as the crisis pushes the Eurozone to tighter integration in economic policy and banking regulation, Tusk and his senior ministers are seeking ways to push the debate forward in Poland without stirring the population against the plan. A series of recent moves to ease more progressive social legislation past conservatives in the staunchly Catholic country has whipped up debate.

While PiS is a disorganized force, its support would be needed to approve the constitutional changes. But it's not just a question of trying to push euro-adoption past the opposition. There is a significant conservative force within Tusk's PO that's opposed to both the euro and wider social justice which could threaten the government's survival if provoked. Forty-six PO MPs voted against their own party's bill on civil partnerships in late January, and Justice Minister Jaroslaw Gowin, who attacked that bill as unconstitutional, could pose a real threat from the right of the party.

Media speculation suggests Gowin - a rare voice of dissent in the well-oiled PO machine - could take up to 40 deputies with him should his fight with the party leadership flare up. With the addition of opposition from conservative junior coalition partner PSL to many of the government's proposals, antagonizing the right could threaten the government's majority. At the same time, Tusk needs the conservatives in PO to maintain the inclusive image that the party has successfully promoted to voters over the past two elections.

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