Brussels, 12/05/2009 (Agence Europe) - Poland's objective to join the eurozone on 1 January 2012 could be deferred by at least one year, Finance Minister Jacek Rostowski has intimated. “The Ist of January 2012 is still realistic, but it may require some delay”, he explains in The Financial Times of 12 May. “The world crisis has come along and it would be naïve to pretend it has had no effect … if we move it by one year that's not the end of the world”, he said seeking to be reassuring.
If Poland wants to adopt single currency early 2012, it must integrate the European Exchange Rate Mechanism II (ERM II) during at least two years before changing to the euro, i.e. by the end of the year at the latest. During this period, the zloty may fluctuate by more or less 15% around a pivotal rate defined compared to the euro. With the economic and financial crisis, the Polish currency first of all suffered considerable depreciation compared to the euro before improving and gaining more stability in the past few weeks, but at a rate nearly 30% lower than in July 2008. Exchange rate stability is, however, not the only challenge that Warsaw must face with a decline in its GDP in 2009 and constant worsening of its public finance situation. The European Commission foresees a fall in Polish GDP of 1.4% this year and, if the government still hopes for positive growth of 1.7%, there is great uncertainty surrounding its expectations. “Our forecasts are still that we expect positive growth this year, but obviously given the degree of uncertainty … it may end up that the Commission will have been correct”, the minister admits. According to the latest Commission forecasts, the public deficit criteria for accession seem to be getting more difficult to meet. The rate of deficit, which must not exceed 3% of GDP, looks as though it will reach 6.6% this year (4.6% according to Mr Rostowski) and 7.3% in 2010 if policies remain unchanged. This would entail excessive deficit procedure for Poland (EUROPE 9894), which would have to keep to an ambitious adjustment trajectory if it hopes to join the euro in the next two years. At the same time, public debt is getting dangerously close to the limit allowed of 60% of GDP, with 53.6% in 2009 and 59.7% in 2010. (A.B./transl.jl)