Euro makes for small change in Poland
The introduction of new euro notes and coins overwhelmed some banks in the European Union (EU) as citizens unloaded soon-to-be obsolete currencies. But in Poland the new legal tender that hit the streets in 12 Western nations hardly caused a stir for banks and businesses, industry professionals and observers here said last week.
The 12 European Monetary Union (EMU) members replaced their national currencies with the euro at the beginning of the year. Poles have until the end of 2002 to exchange the currencies of these countries at local banks though Polish companies doing business in the EU have already had to start account conversions.
Industry professionals said the changeover to the euro would have subtle but profound effects on Polish businesses, making it easier for importers and exporters that trade heavily with EMU countries to deal with a single currency.
"(The change to the euro) is gradual and to an extent marginal," said Krzysztof Jakubiszyn, an adviser to the National Bank of Poland (NBP)'s president, of the impact of the single currency on Polish companies.
But the euro's debut has some clear benefits for Polish importers and exporters, particularly in the automotive, furniture production and electro-engineering industries, which trade heavily with Western Europe. They will benefit from greater price transparency, allowing them to see prices of the same products in different markets in one currency.
"If you are exporting or importing goods or services to the euro area, it's far more easy to compare offers of all in one currency," Jakubiszyn said.
In addition, the euro's introduction eliminates exchange-rate risk for companies doing business with the 12 EMU nations by replacing their individual currencies with the single currency, industry professionals said. It also reduces bank transaction fees for one euro-based account rather than for several accounts for different currencies.
For individuals, the new currency had little impact.
Poles did not rush to their local retail bank branches and other exchange outlets to convert Deutsche marks, French francs and Italian lira left over from their vacations, although some banks reported minor increases in branch traffic for currency exchanges after Jan. 1.
Iwona Ryniewicz, the director of public relations at Bank Handlowy, said customer volume at branches late last week was about the same as usual; Bank Handlowy had informed its customers in advance about the introduction of the euro.
The NBP said Polish banks last Wednesday reported that 10-30 clients came to their branch offices to exchange the old currencies. "Polish citizens have the whole year to change their money, and we don't see people in a hurry," Jakubiszyn said.
Another observer noted that most Poles don't hold EMU currencies that needed to be converted. "If Poles have cash at home, it's mostly U.S. dollars, so there's no reason to go to banks," said Ireneusz Kamiński, head of the Euro Info Center in Warsaw, which works with Polish companies to prepare them for the new currency. He added that most transactions for EMU currencies were conducted automatically at Polish banks.
Likewise, Polish commercial banks did not see an influx of account conversions last week since the euro has been used in the financial market since Jan. 1, 1999, the date when Polish banks started allowing their customers to convert accounts based on the 12 EMU currencies to the euro. On Jan. 1, 2002, the change became mandatory in Poland.
While Polish banks are obliged by law to accept and convert the currencies of the 12 EMU countries for their customers, they said they were not making substantial profits from the transactions.
Roseanne Gerin
