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UPDATE 1-Poland in no rush to join euro, says finmin

Published 05/12/2010, 04:43 AM
Updated 05/12/2010, 05:04 AM

* Euro zone needs time to overcome debt crisis

* Rostowski says 2015 entry still possible but no hurry

(Adds more quotes, background)

WARSAW, May 12 (Reuters) - The euro zone, hammered by financial markets over the debt woes of some member states, needs time to "refurbish" and Poland is in no rush to join, Finance Minister Jacek Rostowski said on Wednesday.

His comments echoed those of Prime Minister Donald Tusk who signalled last week that the European Union's largest ex-communist economy had put its ambitious euro plans on hold for now and was cautiously monitoring the debt crisis.

"The euro zone is now like a house that needs some work, repainting and refurbishing," Rostowski told Radio Zet.

"As with all such works, there is some noise and dust, so it's maybe better that we are in our own little house and in a few years, when the euro zone is refurbished, we move there."

Tusk's centrist government insists euro adoption remains a strategic objective but has not set an official new target date after the global financial crisis last year forced it to drop its 2012 goal for swapping zlotys for euros.

Analysts and some officials say 2015 is now the earliest possible date for Poland to join the euro zone. "2015 is a possible year, but for a long time we have been saying we are not in a hurry to join the euro," Rostowski said.

Poland was the only EU member state to avoid recession last year but a sharp slowdown in growth has driven its budget deficit higher and analysts say Warsaw faces a tough battle reducing it to a level that meets euro membership criteria.

Poland also faces hurdles in parliament to euro adoption, with the right-wing main opposition Law and Justice party (PiS) opposed to amending the constitution to allow for adoption of the common currency.

PiS leader Jaroslaw Kaczynski is now a candidate for Poland's presidential election, set for June 20, after the death of incumbent Lech Kaczynski, his twin brother, in a plane crash. Kaczynski would further hamper Tusk's euro plans if elected.

Asked if he feared Kaczynski's win in the election, Rostowski said: "Yes, I am afraid of the legislative paralysis that we have been seeing over the last two-and-a-half years."

"We managed to weather the (financial) crisis with our partners at the central bank, but we must not delude ourselves. We will be seeing similar, maybe less strong but maybe even stronger problems over the next, let's say, six months, and we cannot afford such paralysis in this situation."

Lech Kaczynski used his veto to block key government reforms and his brother is expected to do likewise if elected. Opinion polls place him second after Bronislaw Komorowski, the candidate of Tusk's ruling pro-euro, pro-business Civic Platform (PO). (Reporting by Adrian Krajewski, writing by Gareth Jones, editing by Stephen Nisbet)

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