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UPDATE 1-Polish president backpedals on euro adoption

Published 10/30/2008, 12:54 PM
Updated 10/30/2008, 12:56 PM
TGT
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(Releads with Kaczynski's comments)

WARSAW, Oct 30 (Reuters) - Poland's president backpedalled on remarks by an aide who said he had warmed to the euro, saying it was too early to set a target date for euro zone entry and the national currency was critical to the country's sovereignty.

Poland's centre-right government wants to adopt the euro in 2012 but the ambitious plan will not materialise without the support of the conservative president Lech Kaczynski and his twin Jaroslaw, leader of the euro-sceptic main opposition party, Law and Justice (PiS).

PiS, whose votes are needed to change the constitution to adopt the common currency, says euro adoption in 2012 would be too early.

After euro talks on Wednesday between the president and Prime Minister Donald Tusk, Kaczynski's top aide said the president had warmed to the idea of euro adoption, offering hope of a political compromise.

But later on Thursday Lech Kaczynski reversed his rhetoric again:

"We must tell the citizens, that euro adoption may lead to a decline in their income of 10-15 percent," Kaczynski told a news conference in southern city of Tarnow. "I have serious doubts if we should be deciding on our road to the euro right now." Poland's government on Tuesday rubber-stamped a timetable for adopting the euro on Jan. 1, 2012, despite resistance from PiS, and said it would start work on changing the constitution.

"It's not yet said that 2012 means adopting the euro. I have not made any declarations regarding it (the change of the constitution) during the meeting with Prime Minister Tusk," Kaczynski said.

"I am ready for talks but a national currency is a critical element of sovereignty," Kaczynski added.

Given the political disagreements, many economists and political analysts are sceptical about the 2012 target date.

Opinion polls show a majority of Poles back euro adoption but support for change may diminish as an economic slowdown begins to bite and nationalist politicians play on voters' fears of higher prices inside the euro zone. (Reporting by Wojciech Zurawski, writing by Karolina Slowikowska and Gabriela Baczynska)

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