Euro Risky for Poland

Not Yet

Not Yet

Polish accession to the Eurozone, “may seem interesting from a political point of view, but economically it is extremely risky,” says Professor Marek Belka, head of the National Bank of Poland (NBP). He noted that enthusiasm for the Eurozone is not great in Poland. “We are not saying we will never join, but at this stage we are trying to make the best use of the time that is available to us in order to be well prepared,” he added. According to Belka, the Polish economy is not structurally competitive enough to enter a monetary union with Europe’s strongest economy, Germany, because it competes principally through lower prices. Hence, the competitive advantage may disappear when wages begin to rise and the national currency strengthens as was demonstrated by Slovakia when it joined the ERM-2 exchange rate stabilisation mechanism. “Poland’s economy has a long way to go before it becomes a perfect member of the monetary union,” said Belka. In this context, he highlighted the need to increase the resilience of the economy, which requires a reduction in the fiscal deficit, maintaining low public debt, reforming the labour market, developing a rental housing market, improving infrastructure, and increasing innovation. According to Belka, twenty-five years after the transition from a centrally-planned economy and ten years after joining the EU, Poland now has a strong market economy, avoided macroeconomic imbalances, and has became a middle-income country. Now the problem facing the country is to transform itself into an advanced economy.

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