* ERM-2 entry seen more likely in second half of this year
* Document outlining conditions for entry set to be approved
* Political opposition to euro plans seen weakening
By Gareth Jones and Adam Cox
WARSAW, April 24 (Reuters) - Poland is unlikely to join the European Exchange Rate Mechanism (ERM-2) in the first half of 2009 but it can still adopt the euro as planned in 2012, the minister responsible for the single currency said on Friday.
Ludwik Kotecki, a deputy finance minister, also told Reuters in an interview any possible delay in the timetable -- approved last autumn before Poland's economy was pummelled by the global financial crisis -- would be only one year or at most two.
"The situation is such that taking into account the conditions it will probably not be possible to enter ERM-2 in the first half of 2009," he said.
"But even if not in May or June, it is not impossible still for us to be in the euro zone in 2012 ... because we can still have the exchange rate criterion fulfilled," Kotecki said, adding this would mean entering the ERM-2 grid by year-end.
Prime Minister Donald Tusk's centre-right government had aimed to put the zloty into the ERM-2 grid by June 30 in order to adopt the euro in January 2012. Under EU rules, a currency must spend at least two years in ERM-2 before euro adoption.
Many economists are sceptical that Poland can meet its target date, given increased currency volatility, a sharp economic slowdown and political opposition.
Pressed on the possibility of a delay in the timetable, Kotecki said: "I think it is more a question of one year or in an extreme case (a very difficult and weak 2010) two years, not five or seven years. In general, as soon as possible."
The cabinet is likely to approve a document next Tuesday spelling out its conditions for ERM-2 and euro entry in light of the recent changes in Poland's economic situation, Kotecki said.
"Our document will concentrate not on dates but on conditions, these being zloty volatility ... and the political situation," he added.
The government wants the zloty to return to a "much lower and more natural level of volatility over a period of a few months" before ERM-2 entry, Kotecki said.
The zloty has seen considerable volatility in recent months, but the ERM-2 grid will require Poland to prevent its currency from straying more than 15 percent from its parity rate.
DEFICITS, POLITICS
Kotecki said on Wednesday Poland's general government budget deficit in 2008 hit 3.9 percent of gross domestic product (GDP) and was likely to be around the same level this year, well above the 3 percent threshold set by the EU's Maastricht Treaty.
A senior aide to Tusk said on Thursday the 2009 deficit could end up as high as 4.6 percent.
Kotecki told Reuters Warsaw would rein in the deficit but added success would hinge on the macroeconomic situation.
"For the 2012 euro target date, the most important factor will be the 2010 deficit because it forms the base for the assessment of our readiness to adopt the euro," he said.
The government will decide in June whether to revise its central budget deficit target of 18.2 billion zlotys, he said, adding: "We still don't know the income tax revenues but we are quite optimistic because of higher wage increases last year."
Analysts expect Poland's economy to expand by 0.8 percent in 2009 compared with 4.9 percent last year.
The government has been trying to overcome hostility from the eurosceptical main opposition party, Law and Justice (PiS), to amend Poland's constitution, a move most legal experts agree is required for euro adoption though not for ERM-2 entry.
PiS, which lags far behind Tusk's Civic Platform in opinion polls, recently lost three lawmakers in parliament in disputes over candidates for June's European Parliament elections, potentially reducing its ability to block an amendment.
"The PiS is shrinking, so from this point of view things are working for us ... They will be a weaker party and at some stage they will be forced to agree on the euro because it will be a political calculation for them," Kotecki said.
Opinion polls show a majority of Poles back euro adoption. PiS says Poland should join the euro zone much later than 2012 after it has closed the wealth gap with richer western Europe. (Writing by Gareth Jones, editing by Stephen Nisbet)