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ANALYSIS-Polish PM basks in EU acclaim, euro still elusive

Published 04/30/2009, 10:41 AM
Updated 04/30/2009, 10:48 AM
TGT
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By Gareth Jones

WARSAW, April 30 (Reuters) - Polish Prime Minister Donald Tusk has deftly used meetings with European leaders this week to showcase his country's successes since joining the EU five years ago, but his cherished goal of euro membership remains elusive.

German Chancellor Angela Merkel, the prime ministers of Britain, France, Italy and others all paid glowing tributes to Poland's progress as a politically stable and increasingly prosperous member state since its accession on May 1, 2004.

Many of the leaders were in Warsaw for a gathering of the conservative European People's Party (EPP), the largest grouping in the European Parliament, to launch campaigning for EU-wide elections to the assembly in June.

The EU and Tusk, whose centre-right Civic Platform (PO) is far ahead of rivals in Polish opinion polls, both stressed the benefits to both Poland and the EU of the 2004 "big bang" enlargement that took in 10 mostly ex-communist new members.

"Poland's accession... boosted Europe's economy and our internal market and improved Europe's security... and its geostrategic and political position in the world," European Commission President Jose Manuel Barroso told EPP delegates in Warsaw's monumental, Soviet-era Palace of Culture on Thursday.

Tusk wants Poland, the EU's sixth largest member state by population and its biggest ex-communist economy, to play a role in the Union commensurate with its size and strategic location.

To that end, his government has tried hard since taking power in 2007 to repair ties with key trade partner Germany, the European Commission and also with historic foe Russia -- all badly strained under the previous conservative and nationalist-minded administration of Jaroslaw Kaczynski.

Tusk's government can also claim credit, along with Sweden, for the EU's "Eastern Partnership" project, which aims to build closer ties with ex-Soviet states such as Ukraine and to counter Russian influence in the region. An "Eastern Partnership" summit will take place in Prague next week.

EU BENEFITS

Playing the EU card now -- parades and open-air concerts are planned in coming days to mark the anniversary -- should further boost Tusk's party despite growing concerns among Poles about the slowing economy, rising unemployment and tighter credit.

"I think the EPP meeting is positive for him. It shows Tusk as an equal among equals. This is important because... Poles sometimes feel we are only second-class citizens in Europe," said Eugeniusz Smolar of the Center for International Relations.

"It also enables the PO to depict the main opposition party as very negative," he added, referring to Kaczynski's Law and Justice (PiS) party, which is opposed to further EU integration or early adoption of the euro.

Poles seem to share Tusk's enthusiasm for the EU.

An opinion poll published by the Gazeta Wyborcza daily on Thursday showed 85 percent back EU membership. Most Poles agree joining the EU has helped the economy, though a sizeable minority in this staunchly Catholic country views EU liberalism on moral issues as a threat to the traditional family.

Thursday's newspapers highlighted the benefits of EU membership. Poles can now travel and work freely across Europe -- and millions do -- and some 91 billion euros ($121 billion) in EU funds are expected to flow into the country between 2007 and 2013.

Poland's annual economic growth would have been nearly two percent lower outside the EU, the Rzeczpospolita daily said.

EURO DELAY

But the main failure of successive governments on the EU front since 2004, the papers said, has been adopting the euro.

Tusk announced last autumn, just before the global economic crisis hit the region, that his government aimed to put the zloty into the pre-euro European Exchange Rate Mechanism (ERM-2) by July this year and to adopt the euro in 2012.

That timetable now looks unrealistically optimistic as the economic slowdown -- nobody here speaks of recession, at least not yet -- drives up the government's budget deficit and increases the volatility of the zloty currency.

The government remains publicly committed to the timetable, not least because it does not want to admit PiS was right in arguing for a later target date, but it has accepted Poles will probably have to wait longer before they can start using euros.

A Reuters poll of economists published this week saw Poland now entering ERM-2 -- where the zloty would trade in a fixed range against the euro -- only in 2010 and adopting the euro in 2013.

Economists say euro delay may be no bad thing as it leaves the government greater flexibility in tackling the slowdown.

Delay is unlikely to harm the government politically.

"People understand the euro is a question of years, not months," said Pawel Spiewak of Warsaw University.

"In any case, the euro allows Tusk to portray himself and his party as more European and to push Kaczynski into a corner," he said, adding that Kaczynski could not afford to be very positive on the euro because of his nationalist voters. (Additional reporting by Gabriela Baczynska, editing by Mark Trevelyan)

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