Skepticism towards euro adoption grows

Poland's goal to adopt the euro in 2011 is not likely and 2012 is more doable, according to President Lech Kaczyński's office head Piotr Kownacki.

Kownacki said that preparations for the euro take about three years, but since Poland hasn't started yet, swapping the złoty for the euro is unlikely before 2012.

"The prime minister says we will be prepared in 2011, but this does not mean we will have the euro in 2011," Kownacki told RMF FM radio. "2012 is doable."

Prime Minister Donald Tusk said on Tuesday that the central bank agreed to make Poland ready in 2011 to adopt the euro meeting all criteria and getting a green light from the European Commission to adopt the currency. A detailed timetable will be prepared next month.

Meanwhile, economists remain skeptical that Poland can actually adopt the euro by the 2011 target due to a number of hurdles. Domestic politics and economic criteria could deter Tusk's ambitious plan.

Economic requirements present a hurdle for Poland, where currently inflation is at 4.8 percent Poland's budget deficit needs to be at less than three percent of GDP, public debt less than 60 percent of GDP and inflation to fall below the 1.5-percentage-point ceiling. Then Poland is expected to be in the ERM-2 zone for two years to watch the stability of the currency against the euro.

In addition to meeting the economic requirements, Poland's constitution may need amendment. PiS leader Jarosław Kaczyński has said that his party will not support the government's push for euro adoption. The only way would be if Poland holds a referendum and majority of Poles vote in favor of the common currency then the party was likely to agree to it.

When Kownacki was asked during the interview if the President supports the idea of a referendum, he responded, "This [euro adoption] should be well-prepared and analyzed, and only then announced."

Source: Reuters