A longer wait for eurozone entry

Cezary Mech, Law and Justice's (PiS) financial expert and the likely future Finance Minister, is doubtful whether Poland's entry into the pre-euro ERM-2 (Exchange Rate Mechanism) grid in 2007 is realistic. He underlined that it is still not clear when Poland will be able to peg the złoty to the euro, so it makes little sense to talk about eurozone entry targets.

Entering ERM-2 in 2007 is necessary if Poland wants to adopt the single currency in 2009.

PiS' expert claims that a key element in adopting the euro is whether the EU would include Warsaw's pension reform in the budget. If it doesn't it "would mean that we would have to find extra savings of zł.15 billion," he said at the WBJ's Press Breakfast last week, adding that this would hurt economic growth and would greatly reduce the level of public expenditure. The zł.15 billion roughly represents half of the expected budget deficit, which PIS wants to keep at the level of zł.30 billion for the next four years.

Mech also said that it would perhaps be wise to see how the other EU members fared during the required two year membership in the pre-euro mechanism.

Adopting the euro has become an issue in the coalition-building talks. Jan Rokita, Civic Platform's choice for Deputy Prime Minister, claims that entering the eurozone will help curb the złoty's appreciation and secure economic growth in Poland.

For his part Mech didn't rule out joining the currency club, saying: "If it turns out that it is profitable then Poland will enter the eurozone." PiS has said it won't make any binding decisions on adopting the euro in the new parliamentary term.