Government is upbeat about Poland's chances of joining the euro zone in 2006

The zloty could be included in the European Exchange Rate Mechanism (ERM II) and join the euro zone in 2006, according to objectives outlined in a government report on Poland's integration with the European Union (EU). Neither the government nor the National Bank of Poland (NBP) have set any target dates for joining the Eurpean Monetary Union (EMU). However, the government says this could happen on January 1, 2003. The zloty exchange rate would then be pegged to the euro, within the 15%-parity band. Before adopting the common currency, Poland needs to fufill certain requirements. Poland has already met a budget deficit requirement of less than 3% GDP and public debt not exceeding 60% of GDP. However other targets, such as inflation not exceeding 1.5 points above the average for the three best-performing EU countries, and a long-term interest rate only 2 points above the average for the three EU -countries with the lowest levels, are still too stringent. (Parkiet, page 6) P.S.