Poland should rethink euro entry date-c.bank head

The current situation prompts a rethink of Poland's euro entry date, the head of its central bank was quoted as saying on Monday, adding there are arguments for a rate cut.
Prime Minister Donald Tusk announced last month that Warsaw wanted to be ready in 2011 to join euro zone, with entry expected the following year.
"Current situation prompts a rethink of the euro entry date," central bank governor Slawomir Skrzypek told daily Rzeczpospolita in an interview.
"Before we enter the ERM-2 rate exchange mechanism, global financial turmoil should be finished," he added.
A candidate country must stay in the ERM-2 for two years before qualifying for the euro.
The governor, seen as a dove among the central bank's 10-strong Monetary Policy Council, also said there are lots of arguments backing a rate cut.
"There are lots of arguments justifying a need for an interest rate cut in Poland," Skrzypek told daily Rzeczpospolita in an interview. "There are many factors singalling for the tightening cycle to at least be halted."
Skrzypek, referring to the recent banking crisis, told Rzeczpospolita the central bank would play the role of a "last-hope lender," if such a problem occurs.
"If there occur problems with liquidity, the central bank is ready to react," he said.
Early on Monday the finance ministry said in a statement there is no threat to Poland's financial market and the government will meet later in the afternoon to discuss its strategy at the European Council meeting due on October 15-16.
The key interest rate stands now at 6.0 percent.
Source:By Adrian Krajewski,Andy Bruceguardian.co.uk

Climate Talks Push Ahead in Poland Amid Credit Crunch

Oct. 13 (Bloomberg) -- Environment ministers from 40 nations met today in Warsaw to lay the groundwork for new climate-change regulations that may raise costs for polluting industries such as power generation and transportation.

Attempts to reach an agreement on limits for carbon-dioxide emissions at United Nations-sponsored talks in December face their biggest hurdle in the credit crisis that's pushing the world economy toward recession, said Astrid Klug, Germany's deputy environment minister.

``We have to make sure that the financial crisis does not hinder climate-change efforts,'' Klug said today in an interview in Berlin. ``This is critical because it's the major threat'' to the negotiations, she added.

Governments in Europe and the U.S. have stepped in to bail out banks, trying to protect the global economy from the biggest financial turmoil since the Great Depression. Stock indexes in the U.S. last week slid the most since 1914.

Environmental ministers meeting through tomorrow in Warsaw will discuss progress made since the UN conference in Bali last December and priorities for one in Poznan, Poland, this December. Aiming to curb CO2 output that add to global warming, the negotiators are seeking to conclude an accord between 192 nations by a December 2009 UN conference planned in Copenhagen.

Countries must ``keep the momentum'' to forge new rules to slow global warming and adopt cleaner technologies that may create millions of jobs, Danish Climate and Energy Minister Connie Hedegaard said.

`Lower Carbon World'

``The financial crisis is not working against this agenda,'' Hedegaard said in an Oct. 10 interview from Luxembourg. ``On the contrary, to take the climate and energy challenges seriously will be one of the ways we can make this shift into a lower carbon world and that will benefit our situation.''

The European Union's 27 members currently are hammering out a climate and energy package that includes a target of cutting emissions of global-warming gases by 20 percent by 2020. Hedegaard said she expected countries to work through objections to the draft law, including opposition by Poland to provisions on auctioning emissions credits, or permits that allow companies such as utilities to emit specific amounts of greenhouse gases.

``It would be difficult for governments to say right now `We're just going to forget about climate change because we have a big financial crisis,''' said Trevor Sikorski, a carbon analyst at Barclays Capital in London. ``One crisis doesn't stop climate change from creating yet another global crisis we'd have to deal with.''

German Target

Germany aims to help reach an accord on the European carbon- trading system after 2012, said Michael Schroeren, a spokesman for the environment ministry.

In that year emissions limits expire for Germany and most other developing countries under the 1997 Kyoto treaty, leaving a void for addressing man-made greenhouse gases.

A United Nations panel said last year it would cost as much as 3 percent of economic output to keep the concentration of greenhouse gases in the atmosphere at current levels in 2030. Tools include investing in renewable energy, making buildings and vehicles more energy efficient and developing technology that captures polluting gases from plants and pumps them underground.
Source: By Alex Morales and Jeremy van Loon
bloomberg.com