💎 Fed’s first rate cut since 2020 set to trigger market. Find undervalued gems with Fair ValueSee Undervalued Stocks

Polish PM makes last bid to woo opposition on euro

Published 11/04/2008, 07:26 AM
Updated 11/04/2008, 07:59 AM

By Pawel Sobczak and Karolina Slowikowska

WARSAW, Nov 4 (Reuters) - Poland's prime minister will launch a last-ditch effort on Tuesday to win political backing for his government's 2012 euro entry plan but an unyielding opposition means a risky referendum may be the only way out.

Donald Tusk will urge the leaders of main political parties at a meeting to back a euro adoption roadmap that investors, the business community and the leftist opposition say is Poland's best protection against the global economic crisis.

But members of the euro-sceptic, opposition-leading Law and Justice party (PiS), whose backing is needed to remove a constitutional roadblock to euro entry, have suggested they are likely to stick to their guns and force a plebiscite.

"We want the prime minister to present economic arguments for the euro, a balance of costs and benefits for the average Pole," conservative caucus leader Przemyslaw Gosiewski said.

"In my opinion, a referendum should be the start to any activity related to euro adoption. So first a referendum, then changes to the constitution," he added.

Poland's constitution states its central bank is the only body able to dictate monetary policy and print currency, responsibilities that would revert to the European Central Bank if Poland swaps its zlotys for euros.

Under Tusk's plan, Poland would enter the ERM-2 currency grid by the middle of next year, meet all the requirements for euro adoption in 2011, and join the euro zone in 2012.

Opinion surveys show most Poles want the euro, but a majority referendum vote may not be enough.

For such a result to be binding, turnout must be at least 50 percent -- a difficult prospect for Poland, where voter turnout is usually low. It was just above 50 percent in the last general election, which most pundits saw as a surprisingly high level.

A referendum would also expose the government to a political battle with the conservatives, who analysts say would likely still not back constitutional changes after a 'yes' vote unless turnout made it binding.

Some analysts have said that Tusk's dive into a debate over the euro was a bold move that would highlight the opposition's anti-European Union tendencies after several years in which Poland has prospered from Brussels cash and investment.

But they also say the risks around a referendum could potentially derail the entire euro zone exercise, and Tusk's main decision would be whether it was worth the political showdown.

"A referendum may be won but it's risky. It is unlikely the turnout would be above 50 percent," said Iwona Jakubowska-Branicka, professor at the Warsaw University.

"So all this trouble, a tough referendum campaign battle and a possibly problematic result, just to end up in the same spot that we are now in... It seems to make little sense for the government." (Writing by Karolina Slowikowska; editing by Patrick Graham)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.