Poland and The Euro - Political Preparations For Euro Adoption

Political Preparations For Euro Adoption

Article 227 of the Constitution of the Republic of Poland will need to be amended to allow a change of currency from the Złoty to the euro and a change of the central bank, so there is no guarantee in regards of when Poland will choose to adopt the Euro. As of May 2011, the constitution had not yet been changed, and it was doubted the ruling government could establish a superior majority (2/3) in the current Polish Parliament, for this needed constitutional change.

On 10 September 2008, speaking at the launch of an economic forum in a Polish resort of Krynica-Zdrój, Polish Prime Minister Donald Tusk announced the ruling government's objective to join the Eurozone in 2012. However, since the Polish constitution will need to be changed first and they will have to join the ERM 2 before second quarter 2009, a target date that is still very aggressive. Regardless, on 28 October 2008 the Polish government confirmed their plan to join the Eurozone in January 2012.

On 5 November 2009, speaking at the news conference Polish Deputy Finance Minister Ludwik Kotecki said the government may announce a national strategy for euro adoption in mid-2010. In an interview for Rzeczpospolita daily 22 October 2009 he also said Poland could adopt the euro in 2014 if the general government deficit is reduced in 2012.

Former President Lech Kaczyński said on news conference that Poland was unable to join Eurozone before 2015, and even that date was still very optimistic. Also, Polish government officials had confirmed that Poland wouldn't join Eurozone in 2012.

On Friday, 11 December 2009, Polish Prime Minister Donald Tusk said Poland could join the eurozone in 2015. Speaking during Finance Ministry-organized seminar on the euro-adoption process on 15 December 2009 Deputy Minister of Finance Ludwik Kotecki said the year 2015 is more likely than 2014, however he declined to specify the official target date.

In the years following the 2008 Global Financial Crisis, economic statistics showed that the devaluation of its floating currency the zloty led Polish products to became more competitively priced to foreign buyers, and because of that Poland had a higher economic GDP growth in subsequent years than if the country had been a part of the eurozone. The Polish government advocated in 2012 that it would only be wise for Poland to join the eurozone once the euro crisis had ended, based on the argument that delaying their accession would minimise the risk for Poland to become one of the net financial creditors to other eurozone countries in financial difficulties.

In December 2011 Polish foreign minister Radosław Sikorski said that Poland aimed to adapt the euro on 1 January 2016, but only if "the eurozone is reformed by then, and the entrance is beneficial to us." As of August 2012, there is still no official or binding target date for the Polish euro adoption, and no fixed date for when the country will join ERM-II (the fifth convergence criteria). The current Polish government plans to comply with all the Euro convergence criteria by 2015.

In autumn 2012 the Monetary Policy Council of the Polish National Bank published its official monetary guidelines for 2013, confirming earlier political statements that Poland should only join the ERM-II once the existing eurozone countries have overcome the current sovereign-debt crisis, to maximise the benefits of monetary integration and minimise associated costs. The governor of the National Bank, Marek Belka, has stated that the euro won't be adopted before the end of his term in 2016.

In late 2012, Tusk announced that he planned to launch a "national debate" on euro adoption the following spring, and in December 2012 Polish Finance Minister Jacek Rostowski said that his country should strive to adopt the euro as soon as possible. However, the opposition Law and Justice Party opposes euro adoption and the governing parties do not have enough seats in the Sejm to make the required constitutional amendment. In January 2013, Polish President Bronislaw Komorowski stated that a decision on euro adoption should not be made until after parliamentary and presidential elections scheduled for 2015, but that in the meantime the country should try to comply with the convergence criteria. In February 2013, Jaroslaw Kaczynski, leader of the Law and Justice Party stated that “I do not foresee any moment when the adoption of the euro would be advantageous for us" and called for a referendum on euro adoption. Rostowski has stated that Poland won't set a target date for the switch since the country first needs to carry out reforms to prepare itself. In March 2013, Polish PM Tusk said for the first time that he would be open to a referendum on euro participation. In April 2013 Belka said that Poland should demand to be permitted to adopt the euro without first joining the ERM-II, one of the adoption criteria specified by the EU treaties, due to concerns over currency speculation.

The euro adoption process in Poland is regulated by the Strategic Framework for National Euro Changeover Plan (adopted by the Council of Ministers in 2010) and the National Euro Changeover Plan (approved in 2011 by the Committee for European Affairs). The plan comprises an economic impact assessment of the euro adoption, followed by a chapter on the measures needed to ensure Polish compliance with the "Maastricht convergence criteria", and finally a roadmap for the euro changeover process. One of the key details investigated as part of the work to update the plan is whether or not Poland will need to pass a constitutional amendment to pave the way for the euro changeover. On 21 December 2012 it was announced by the Ministry of Finance that they planned to update the country's National Euro Changeover Plan in 2013, mainly due to the recent institutional changes in the eurozone which require additional considerations. The Polish Finance Minister emphasised that the government's support for euro adoption remain unchanged as a strategic goal, and will not be changed in the updated plan.