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UPDATE 1-Poland needs political deal to join ERM2-finmin

Published 03/11/2009, 03:00 AM

(Adds detail, background)

WARSAW, March 11 (Reuters) - Poland should join the pre-euro ERM-2 exchange rate mechanism once the zloty becomes less volatile and politicians reach some agreement on euro zone entry, a deputy finance minister was quoted as saying on Wednesday.

Ludwik Kotecki, the government's plenipotentiary for euro zone entry, also told daily Rzeczpospolita the government set the ERM-2 entry for the second half of the year and thus it has not breached the timing yet.

"In my opinion we may realistically think about the ERM-2 when two conditions are met: when the zloty is relatively stable and there is some kind of political consensus," he said.

Kotecki added that reaching political consensus is possible and reiterated the government's view Poland would not need a relaxation of euro entry rules.

In February, the deputy minister said Poland may enter the grid already in May or early June and expected to start of official talks in March.

Many analysts have expressed scepticism that Poland's euro entry plan was achievable as the current global financial turmoil undermines economic stability in the European Union's largest ex-communist member.

(Writing by Dagmara Leszkowicz; Editing by Neil Fullick)

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