Blog by Michael Clay

No Chance for Poland to Adopt Euro Before 2015 - GD ECFIN Official

Poland will likely be able to adopt the euro only beyond 2015, a high official from the Directorate-General for Economic and Financial Affairs told PAP.

"Poland practically has no chances of entering the euro zone ahead of 2015," the official said. "It is a rather common opinion among economists and EU decision-makers.

Based on the EU autumn forecast, Poland will have problems with meeting the fiscal criterion in the next 2-3 years, the official stressed.

"The EC recommendation indicates that your country should decrease the general government deficit to 3% of GDP in 2012 - it is to some point possible but in our opinion it will be difficult and the opinion that Poland might want the EC to change its recommendation to at least 2013 is common," the official added.

The European Commission expects this deficit to stand at 6.4% in 2009, at 7.5% in 2010 and at 7.6% in 2011, in the absence of government actions regarding the fiscal policy.

First we are advised that 2012 will be the date for adopting the Euro and then 2015 and now we have a new target date of some time after 2015. When will Poland really be in a position to adopt the euro and how will this affect it's economy?

Will the Polish people really welcome the euro?, and perhaps see the costs of everyday life increasing as they have done in all other counties that have already adopted the currency.

Economic Fundamentals Point to Stable Zloty - NBP Chief

Poland's economic fundamentals suggest that the zloty should be one of the most stable currencies in the region, although a a high dose of uncertainty exists, central bank NBP head Sławomir Skrzypek told reporters.

"The fundamental of our economy are strong and the zloty has every basis to be stable, one of the most stable currencies in the region," NBP CEO said, offering caveat for a "level of uncertainty on the market that makes any declaration difficult."

Now the Polish Zloty Returns to Appreciation Trend

Poland's zloty started gaining Monday night and will likely continue down that road locals told PAP.

Positive global sentiment, large IPOs by PKO BP bank and PGE power as well as EU funds conversion all contribute to the zloty returning to appreciation trend, Kredyt Bank FX dealer Robert Kęsicki said.

The trend should hold in the coming days, in Kęsicki's opinion.

It seems that every winter the zloty becomes stronger and very summer weaker - is this a normal trend or what is it that influences this phenomena

Poland’ Euro Adoption in 2014/2015 at the Earliest?

Poland will be able to adopt the euro not before 2014-2015, Halina Wasilewska-Trenkner, a member of the National Bank of Poland's Monetary Policy Council said quoted yesterday by the daily Dziennik Gazeta Prawna.

Wasilewska-Trenkner cited the need for meeting Maastricht criteria and a two-year stay in the ERM2 mechanism. She also said that Poland should make necessary amendments in its Constitution ahead of entering the ERM2.

"It is the most important bill but not the only one which should be changed before we start the formal period of preparations for euro adoption, i.e. before we enter ERM2," she added.

The need for a firm date to be established for Poland's entry has never been more important. The constant dialogue and change in dates can be most unnerving to the investors who view Poland as an ideal country to invest in. Continued good GDP results making Poland the leading European economy are encouraging investment and businesses who want to buy from or produce in Poland.

All of these encouraging signs can be stymied if there are continual changes in opinions on the dates of entry to ERM2.

Poland Sees GDP Growth in Q3 Again

Poland's economy is expected to have grown by some 1% in Q3, deputy Finance Minister Ludwik Kotecki told PAP.

Q2 GDP growth amounted to 1.1%. In late August Kotecki said Q3 result would be lower than the Q2 reading.

Once again, Poland looks like being the LEADING economy within Europe with a GDP that many of the other EU nations would just love to be able to show. How can Poland do this every quarter this year to date when others have failed so miserably?

Perhaps it is the mindset of the Polish Government and its determination to learn from the mistakes that the Western nations have made. Perhaps it is the constant message to the Polish people that they must be aware of the dangers around them in overspending.

Whatever the message is, it seems to be working.

EUROPEAN COMMISSION Approves Public Assistance for Polish Dell Plant

The European Commission okayed 54.5 million euros of regional aid for establishing Dell Products Poland's computer manufacturing plant in Łódź, yesterday.

The Commission decided that the investment project will significantly contribute to the regional development and job creation in a disadvantaged region of Łódź province, and that these benefits outweigh any potential negative effects of the aid on competition and trade.

The total value of Dell's investment in Łódź amounts to 189.6 million euros.

This is fantastic news for the Łódz region as Dell has already proved themselves to be one of the largest employers in the region making Łódź a huge centre for electronic manufacturing and assembly

We now need more and more companies from the UK and Europe taking up the opportunities that exist in Poland's second largest city.

The British Polish Chamber of Commerce have a Business Point Centre in Łódź which enables new busnesses to easily start up with a complete serviced office for next to nothing. Enquiries should be sent to us at Export Poland on the contacts form.

Poland's Economy Likely to Show Clear Signs of Rebound

Poland's economy is showing mixed signals and likely slowed in Q3, but should be showing clear signs of acceleration in Q4, Monetary Policy Council member Halina Wasilewska-Trenkner said of her economic outlook.

"The real economy is handling things very well and remains active," Wasilewska-Trenkner told PAP in an interview. But with headline inflation holding above the target range, "inflation pressure remains strong in the economy."

Current Account Surplus at 459m Euros
Poland recorded a current account surplus of 459 million euros in June, well above the 207 million euro surplus in May, according to central bank figures released Wednesday. The trade gap was 26 million euros. Exports fell 20.8% year on year to 8.314 billion euros. Imports fell 31.5% year on year to 8.340 billion euros. Is this not the the ideal time for British Businesses to export to Poland and for Polish companies to look for more sales in the UK. With current rates of exchange, the opportunity to do business is better than ever.  People - take advantage of this opportunity

Poland Can Adopt Euro in 2013 at Earliest: IMF Official
Poland can enter the single European currency in January 2013 at the earliest, the International Monetary Fund’s regional representative for Central Europe, Mark Allen, told the PAP news agency. But Poland need not rush to adopt the euro as the single currency "is no wonder drug, nor is it the Holy Grail," he said. Poland’s deputy Finance Minister Ludwik Kotecki announced last week that, “amid a completely different macroeconomic situation” the government will not be taking the country into the eurozone in 2012, as it had planned.

Poland's euro adoption in 2015 seems an optimistic but already realistic option, President Lech Kaczynski told a news conference, quoting an opinion of professor Gomułka, a liberal economist.

Comments follow Wednesday statement by deputy FinMin Ludwik Kotecki, who admitted that Poland will adopt the euro later than in 2012.

"Euro adoption plan in 2011 was unrealistic from the beginning, year 2012 was unrealistic too so the resignation is a step in good direction," president said, reiterating that "euro is not a remedy for the crisis."

It is a shame that the adoption of the Euro is being delayed but perhaps the enthusiasm of Donald Tusk is not shared by the Finance Minister.