Poland and Czech Republic have different views on joining the Euro-zone

29 March 2012 — Daniela GHETU
Talking at a conference on central European economic policy in Prague, the governors of the Polish and the Czech central banks voiced differing views Friday, March 16th, on their countries' aspirations towards joining the euro, writes The Wall Street Journal. While Poland seems to maintain its commitment to joining the Euro-zone, although envisaging further political difficulties, Czech Republic shows a reluctant position and refuses to adopt a firm timeframe for the Euro adoption.

Marek BELKA, Governor of the National Bank of Poland affirmed his countries' commitment to joining the single currency, but also warned that further political integration could be problematic for Poland, which is the largest CEE state in the European Union. "For Poland, joining the European Union was not only an economic project, but a political project. We have political ambitions, we want to be in the core of Europe", he stated.

According BELKA, the Euro-zone will probably require further political integration, which may prove difficult for Poland to accept. "The problem we'll be getting into in five years' time is that the euro will change into a more integrated area. I don't want to call it a federation, but it will be integrated more tightly. For a country like Poland, it will be more difficult politically and psychologically to join, but it also will be more costly to stay outside," quotes TWS.

Czech Republic's hesitation is no news. In fact, the Czech Prime Minister has clearly refused to commit to a timeframe for the countries adoption of the single currency and Miroslav SINGER, the Governor of the Czech National Bank reiterated this position. "All I can say is that I can't see this country adopting the euro during my term at the central bank which ends in mid-2016," he said.

Miroslav SINGER indicated the European Exchange Rate Mechanism (ERM II), as a potential barrier for euro convergence, as prior to euro adoption both countries would have to spend at least two years in the ERM. This could keep their currencies in a too narrow corridor with the euro during that time, which makes the decision to join the Euro-zone to be postponed for a later deadline.

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