Poland's economy minister nominee says zloty too strong, cautious on euro

WARSAW (Thomson Financial) - Poland's zloty currency is too strong and should reflect an appropriate balance between supporting imports while not blocking exports, the new cabinet's candidate for economy minister was quoted as saying.

Victory for the pro-business Civic Platform in Poland's general elections prompted a flood of cash into the zloty last month, sending it around 5 pct higher and boosting other central European currencies.

'The zloty is too strong right now,' Waldemar Pawlak, leader of the Platform's coalition ally Peasant Party and its nominee for deputy prime minister, told daily Gazeta Wyborcza in an interview.

'The exchange rate has to be adequate to the possibilities of the economy and the society. There has to be a balance between relatively attractive wages translated into euro, while on the other hand it cannot block exports and promote imports.'

The Civic Platform won last month's elections on expectations the party would push forward with public finance and other economic reforms, as well as a swift push to adopt the single currency.

But many signals from senior party officials since have been cautious, and the zloty's upward march has stalled as investors await concrete policy declarations from the new cabinet, which is to be sworn in this Friday.

Pawlak said he had also discussed the euro with finance minister nominee Jacek Rostowski, who has shied away from contact with media in recent weeks but previously had supported an immediate entry to the euro.

'I have talked to Professor Rostowski about this,' Pawlak said. 'Today the situation is different than it was when he drew up these plans. I think that we will have similar views on the euro.'

'He is leaning towards a practical realism, meaning that tools have to be appropriate to the situation, that euro zone entry should happen at the appropriate moment.'

He declined to give a target date for euro adoption.
Source: By Adrian Krajewski, forbes.com