Tuesday

15th Oct 2019

Polish leader cautious on euro entry

  • Euro membership - only when Warsaw feels it is safe (Photo: Images Money)

Polish Prime Minister Donald Tusk on Tuesday (19 February) said his country will only join the euro once it is "100 percent ready," with 2017 said to be the date the government is aiming for.

Addressing the national parliament in Warsaw, Tusk said "our road to the euro area should be clear-cut and the decision must be 100 percent safe for Poland."

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He added that "the decision to join should come when the euro area is ready, in terms of its condition and its readiness for the kind of massive expansion that Poland’s entry would involve. But above all, when Poland is 100 percent ready.”

Lawmakers are believed to be looking at a 2017 deadline for joining the single currency.

Tusk was speaking at the start of a national debate on the future of the eurozone.

Polish MPs will vote on Wednesday (20 February) whether to support the fiscal compact treaty negotiated at the EU summit in December 2011. The fiscal compact enshrines a debt ceiling and a balanced budget "golden rule" in national constitutions.

Economic data indicates that Poland should face few difficulties in satisfying the debt and deficit rules set out in the Stability and Growth Pact needed to join the euro. At 57 percent, the country's debt burden is one of the few in Europe to fall below the 60 percent limit, while its budget deficit is expected to fall below 3 percent in 2013.

The Polish government had previously intended to join the euro in 2012, but scrapped the plans as the eurozone sovereign debt crisis unfolded.

The country, which joined the EU in 2004, has one of the fastest economic growth rates in the EU, expanding at near 4 percent since its EU accession. It was also the only EU country to avoid a recession during the 2007- 2009 financial crisis.

Estonia was the last country to join the euro in January 2011

Meanwhile, Baltic neighbour Latvia is expected to be the next member of the single currency, after Prime Minister Valdis Dombrovskis indicated that his government would submit its formal application in March.

Latvia already meets the debt and deficit criteria despite being the third poorest country in the EU. However, Latvians remain reluctant to give up their currency, with opinion polls indicating public preference for the Lat by a margin of 3:2.

"It's just a technical issue now," Dombrovskis said on Tuesday (19 February). "By July the whole procedure should be finished," he added.

Lithuania is also set to apply for membership, with a view to adopting the euro in 2015.

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