Poland's euro adoption faces delay 

The centre-right government has conceded that 2012 is unrealistic, given the scale of an economic slowdown that has eroded state revenues and driven up the budget deficit, though it remains publicly committed to that entry date.

"We are now working on the Strategic National Plan for Euro Adoption and it will be published in July probably, maybe in early August," Deputy Finance Minister Ludwik Kotecki said.

"It will be an update of the euro roadmap and it will provide new conditions for it," he told parliament. He made no direct reference to the target date, but a member of the central bank's rate-setting Monetary Policy Council (MPC) said she did not now see euro adoption before 2014.

"No matter how we look at it, ERM-2 entry is possible in the second half of 2012 (at the earliest) and then eurozone entry in 2014-2015," Halina Wasilewska-Trenkner told reporters (EurActiv 07/04/09).

A candidate country must keep its currency in the ERM-2 exchange rate for at least two years, where it trades in a range against the euro, before adopting the currency.

Under the Polish government's original roadmap, the złoty would have entered ERM-2 by 30 June. The government has not ruled out the possibility of ERM-2 entry in the second half of 2009 but most economists believe this is very unlikely. Analysts have long argued that the 2012 target is too ambitious.

The International Monetary Fund told Reuters in an interview this week that 2013 was the earliest possible date for euro entry. "Wasilewska-Trenkner's comments reflect a more realistic view of Polish euro-adoption than the one taken by the Polish government. These comments might also be indication for other euro-hopefuls that euro adoption is not necessarily imminent," said senior analyst at Danske Bank Lars Rasmussen.

Earlier on Wednesday, the European Commission gave Poland until 2012 to cut its ballooning budget deficit below the 3% ceiling for euro aspirants. The move came one day after Warsaw, buffeted by the global crisis and falling revenues, downgraded its 2009 budget deficit target to 27 billion zlotys (around €6 billion).

A senior ruling party official said last week that eurozone entry could be postponed until after 2012, but Prime Minister Donald Tusk said following new recommendations from Brussels that delayed euro adoption was "not automatic".

(EurActiv with Reuters)