Poland plans euro entry in 2011

Prime minister Kazimierz Marcinkiewicz told foreign journalists earlier this week that Warsaw should be able to meet the budget criteria by next year, adding that it already recorded a budget deficit below 3 percent of GDP in 2005 and this year, according to fresh official data.

Poland is the only country of the ten new member states which joined the EU in 2004 that has not officially announced to the European Commission when it plans to join the eurozone, with all the newcomers legally obliged to enter at some point.

According to Polish media reports, the country's leading politicians and economists have differing opinions on the issue.

Leszek Balcerowicz, the central bank governor, promotes the earliest possible entry to eurozone, arguing it would boost Poland's economic growth by 0.2 percent a year.

On the other hand, president Lech Kaczyński, from the ruling Law and Justice party, is much less favourable toward the idea.

Last year, he said Polish citizens should decide in a referendum whether to join the euro, pointing out that "Getting rid of one's own currency is a very serious limitation of one's own sovereignty."

Government coalition partner, the League of Polish Families party, is even more hostile saying the move should be put off until 2030, Rzeczpospolita writes.

Analysts view this week's announcement by Mr Marcinkiewicz as a possible sign of concerns by Polish leaders over the worsening image of the country in the EU.

The euro statement follows up Poland's decision to send soldiers to the EU Congo peacekeeping mission and moves toward joining a new EU arms purchasing code, presented as tokens of "European solidarity" by Warsaw earlier this week.

Poland is currently subject to the EU's excessive budget procedure, along with five other new member states that are planning to join the eurozone - Cyprus, the Czech Republic, Malta, Hungary and Slovakia.

Mr Marcinkiewicz argues he will try to put an end to the procedure, despite previous disputes with Brussels over whether Poland can include private pension funds when calculating deficits.

In the country's freshly updated convergence programme, the budget deficit for 2007 is predicted to be 2.2 per cent of GDP, but if pension funds are excluded then the deficit rises to 4.1 per cent, according to the Financial Times.

Poland looks likely to become one of the last new member states to join the eurozone.

The new round of the monetary union's enlargement will be kicked off with Slovenia in 2007, and possibly followed by Lithuania and Estonia which were also originally planning to join next year, but had to delay their plans due to high inflation.
Cyprus, Malta, Latvia and Slovakia may enter between 2008 and 2009, while the Czech Republic and Hungary could follow between 2009 and 2010.
Source: By Lucia Kubosova, http://euobserver.com