Risky climate around Poland euro referendum plans

Poland risks fresh tensions with Brussels over plans to hold a referendum on joining the euro in 2010, with the country's president planning to launch the event personally three years from now.

"In 2010, as it has been announced, the president will hold a referendum [and]...the final decision will be made by the people," finance minister Zyta Gilowska said in Warsaw on Friday (10 November) a few days after president Lech Kaczynski said in London "I am more eurosceptic than my brother [the prime minister]."


The Polish government, including Ms Gilowska, has always been careful to praise the economic benefits of joining the eurozone - a legal obligation under its EU accession treaty - while hammering on the need to protect Polish sovereignty in EU decisions and siding with The League of Polish Families in a government coalition.

Asked if she could promise the president will himself campaign on the 'yes' side in the 2010 poll, Ms Gilowska answered "The only things certain in this life are death and taxes, other categories of life are less so. But in my opinion, I think we can be certain of that."

She nuanced Mr Kaczynski's eurosceptic confession saying "this word 'euroscepticism' should be understood in line with its literal meaning - it means a rational and reasonable attitude. It doesn't mean there is a reluctance to the EU in the background."

But the abstract fiscal benefits of the euro will be hard to sell at popular level without explicit government support, with pro-euro fiscal discipline set to curb welfare spending for Poland's 2 million unemployed and with older Poles still wary of the Frankfurt-based European Central Bank as some kind of instrument of latter-day German imperialism.

"Polish people tend to be unusual" Ms Gilowska explained. "We are more proud [than other EU states] and we are not afraid to argue and ask questions. In a poll published yesterday, 92 percent of Polish people said they are 'patriots'."

Commenting on Poland's referendum plans on Monday, European Commission spokesman Johannes Laitenberger stopped short of explicitly criticising Poland but said "[Poland's] treaty obligations are clear" adding "the euro is to be introduced when the convergence criteria have been met."

A second EU official told EUobserver that "[EU finance commissioner] Mr Almunia has advised member states that given recent referendums in France and the Netherlands [which rejected the EU constitution] it would be risky to hold a referendum on anything for now."

Investors face uncertainty
Meanwhile, multinational companies are increasingly pushing Poland's foreign investment agency - PAIZ - for guarantees that the country will join the eurozone as soon as possible. PAIZ director Andrzej Kanthak told EUobserver last Thursday that "I do not expect there will be such a referendum" on the euro.

The fresh uncertainty in the Polish investment climate - the government has had five finance ministers since last September and could face early elections before 2010 - comes on the back of anecdotal evidence of shortages of skilled labour due to the post-2004 emigration of up to 1 million Poles.

Polish economy minister Piotr Wozniak said last week that directors from LG Philips - due to open new administrative offices in Poland - complained they only got 600 applicants for the 600 new posts on offer, limiting their ability to choose the best staff.

Hard-working Poles
Poland this year is set to attract some $10 billion of foreign investment with its reputation for cheap, highly educated and hard-working labour among the country's key assets in competing for overseas cash against neighbours Slovakia and the Czech republic.

On top of this, Poland's growing financial deficit - set to hit 3.5 in 2007 - is likely to see the European Commission on Tuesday issue a stern warning to Warsaw for breaking the EU's official 3 percent ceiling, despite Ms Gilowska's assurances to Brussels that the deficit is being reined in.

"It's hard for me to understand why the good news we have sent to the EU is not being accepted," the finance minister stated.
Source:euobserver.com