ERM-2 ASAP - EC

The European Commission has advised Poland to enter the ERM-2 system as soon as possible after joining the Union and to delay entering the Euro zone until a few years after this date. ERM-2 is a necessary step towards e ntering monetary union and each country is obliged to keep it for two years before exchanging its currency for the Euro. EU Finance Commissioner Pedro Solbes thinks Poland and other candidate countries should continue with this mechanism for even longer. In this way, the countries could achieve an ideal balance between increasing trust in their own currency while maintaining elasticity in their exchange rate policy. Moreover, if Poland were to opt for rapid adoption of the Euro after joining the common market, Polish companies would gain an unfair competitive advantage. In related news, the zloty reached a 38-month low against the Euro yesterday following news that the SLD/PSL coalition had collapsed, however analysts expect the currency to stabilize soon. (Rzeczpospolita, p. B7, Gazeta Gospodarka, p. 3) M.M.