Poland postpones euro membership decision to 2015

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Poland indicated that the country’s decision to adopt the euro would be taken after the presidential and parliamentary elections due in 2015. No tentative target dates were set, but economists estimate the country could switch to the common currency in 2016-2017.

President Bronis?aw 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, according to reports in the Polish press.

This would take place after the 2015 elections.

Komorowski spoke after a meeting with Prime Minister Donald Tusk and government ministers where the strategy for joining the eurozone was discussed.

Tusk said adopting the euro was vital for Poland, both politically and economically.

"We are strong supporters of Poland participating in the process of European integration and not remaining on the sidelines,” said Tusk, who leads a centre-right coalition government.

“It should be emphasised that the single currency is now a key part of European integration. Staying outside the common currency, as a strategy, would be dangerous for Poland,” Tusk said, as quoted by Polish Radio website.

The prime minister added that even if Poland's progress towards the eurozone is delayed, it would be “still worth meeting the entry criteria because it will be good for the Polish citizens and for the country”.

Another crucial step is to win backing from parliament, where a two-thirds majority vote is needed before Poland can join the eurozone. This means some members of the opposition would need to support euro membership.

The largest opposition party, Law and Justice (PiS), says that a national referendum has to be organised before Poland adopts the single currency. Recent opinion polls indicate that a majority of Poles are opposed to abandoning the Polish currency, the zloty, in favour of the euro.

Deputy Finance Minister Ludwik Kotecki said that technically speaking, Poland could adopt the euro in 2016 or 2017 at the earliest, the daily Dziennik Gazeta Prawna reported.

Kotecki added that the date could be postponed due to both economic and political reasons.

Latvia sets 1 January 2014 target date

Meanwhile, the European Parliament held a debate on Latvia's euro accession with Andris Vilks, the country's finance minister, and Ilm?rs Rimš?vi?s, its central bank governor.

Latvia has a target date to join the eurozone on 1 January 2014. Of the 10 countries that joined the EU in 2004, Slovenia was the first to adopt the euro in 2007, followed by Cyprus and Malta in 2008, Slovakia in 2009 and Estonia in 2011. The countries that joined the EU in 2004 and 2007 have the obligation to join the common EU currency, as soon as they are ready to meet the criteria.

>> Read: Latvia close to eurozone membership, Danske Bank says

French MEP Jean-Paul Gauzès, a coordinator in the Parliament's Committee on Economic and Monetary Affairs for the centre-right European People's Party, said that Latvia's forthcoming entry to the Eurozone was very good news.

“It is a message of hope and trust for this country that has made remarkable efforts to master the crisis, to relaunch growth and fight unemployment, thanks to the citizens that have shown courage and to the clear-sighted reforms led by Valdis Dombrovskis' government,” Gauzès said.

All EU countries, except Denmark and the United Kingdom, are required to adopt the euro. To do this they must meet certain conditions known as 'convergence criteria'.

The convergence criteria for joining the eurozone are formally defined as a set of macroeconomic indicators which measure:

  • Price stability, to show inflation is controlled;
  • Soundness and sustainability of public finances, through limits on government borrowing and national debt to avoid excessive deficit;
  • Exchange-rate stability, through participation in the Exchange Rate Mechanism (ERM II) for at least two years without strong deviations from the ERM II central rate;
  • Long-term interest rates, to assess the durability of the convergence achieved by fulfilling the other criteria [more].

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