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Poland's euro adoption plan dates "flexible"-govt

Published 01/20/2009, 11:28 AM
Updated 01/20/2009, 11:32 AM

WARSAW, Jan 20 (Reuters) - Poland may revise parts of its 2012 euro adoption timetable, the government said in a statement on Tuesday.

Analysts who have been wary of the government's euro entry plans because of the uncertain global and domestic economic outlook, said the statement could be the first signal it is growing aware of the risks to meeting the ambitious timetable.

Prime Minister Donald Tusk has said he is not "doctrinaire" on the euro entry date but stressed on many occasions he is determined to take Poland into the euro zone as it would help the country weather the global crisis.

The European Union's largest ex-communist member plans to enter the pre-euro exchange rate mechanism ERM 2 in the first half of 2009 and adopt the euro in January 2012.

"This timetable of preparations for euro adoption is flexible and open. The idea is to be able to adjust some of its dates or actions to the needed changes, which are now difficult to foresee," the government said in a statement following its weekly meeting.

The timetable was presented before the global crisis started to take its toll on Poland and now analysts are divided on whether it would be profitable for the country of 38 million to stick to the euro adoption plan.

"There are lots of questions marks when it comes to the euro plans - market situation, ability to meet the criteria, etc. So these doubts seem to be reflected in this statement," said Marcin Mroz, chief economist at Fortis Bank in Warsaw.

Some say that thanks to the weakening zloty, which has shed more than a third of its value against the euro since its all-time high, it would be easier for Poland to hold the currency in the tight ERM-2 band -- a prerequisite to adopting the common currency.

However, there are some concerns a speculative attack on the zloty while in the ERM-2 could be staged especially since the country's opposition does not agree to make the needed changes in the constitution.

Poland's constitution says it is the sole right of the National Bank of Poland to conduct monetary policy and to issue money. Once in the euro area, this would be the task of the ECB.

The European Commission said on Monday it expected Poland's general government deficit to rise to 3.6 percent of gross domestic product in 2009 and 3.5 percent in 2010 - above the 3-percent ceiling for the euro zone area countries. (Reporting by Kuba Jaworowski; editing by Stephen Nisbet)

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