Economy Minister backs ideas to peg złoty to the euro

Before the government eventually adopts the euro as the national currency, it has to adjust the economy to EU standards by fulfilling the Maastricht criteria and stabilizing the exchange rate of the złoty to float within a 15% margin to the euro for a two-year period. Meanwhile Rzeczpospolita announced that Poland plans to peg the złoty to the euro, with the National Bank of Poland (NBP) and the Finance Ministry to decide the rate at which the two currencies will be fixed. This idea was supported by Economy Minister Jerzy Hausner, who announced that a decision to peg the currencies before joining the ERM II mechanism is based on sound economic sense and should be considered. "This idea should not be disregarded taking into account the fact that most of our trade is currently conducted in euro," explained Hausner. According to BRE Bank chief economist Janusz Jankowiak, such a move would not be beneficial for the NBP, as it would have to concentrate on maintaining a fixed exchange rate at the cost of paying attention to inflation, which also needs to be kept at a low level to join the Euro zone. (Gazeta Wyborcza, Gospodarka Supplement, p. 4) A.K.