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Poland could hold referendum on euro

WARSAW, May 14 (Reuters) - Poland could hold a referendum on euro adoption if no political compromise can be reached otherwise, Deputy Prime Minister and Economy Minister Waldemar Pawlak said on Wednesday.
"It (a referendum) is possible because this is a very important political decision, although ... it (the process) is more technical in character," Pawlak told Reuters in an interview.
"In my opinion there will be a referendum if there is a big political confrontation ... it will be important to play out a political battle. If there is more understanding and agreement, the decision could then be of a more technical nature."
Finance minister Jacek Rostowski has said Poland, the biggest of the ex-communist economies that joined the European Union in 2004, could take the initial step towards euro adoption by joining the ERM-2 exchange rate grid as soon as next year, to be ready to drop the zloty in 2011 or 2012.
Economy minister Pawlak leads the junior party in the ruling centre-right coalition which is seen as euro friendly.
The leftist opposition party is also in favour of the euro but there may be trouble reaching a compromise on the issue with the biggest opposition party, the conservatives.
A referendum would be risky, but if Poles voted to support the move it could pressure the euro sceptic conservatives into agreeing to euro entry, particularly since Poland's conservative president has said in the past that a referendum on the issue would be a good solution.
Pawlak underlined, however, that Poland's path towards the euro should be a "well thought through process" and that setting a proper exchange rate parity against the euro was more important than the date of euro zone entry itself.
"It is the exchange rate that is of importance, not the entry date ... Public opinion is often fed with exciting information 'when', while the rate at which we will enter the euro zone is the most significant. This is much more important," Pawlak said.
"From the perspective of the success of this entire undertaking, the end effect is not the only important thing but also the transition period, including staying in the fluctuation bands and the first few years in the euro zone."
In order to adopt the euro, Poland must first keep its zloty currency within 15 percent either side of a central parity rate against the euro for a minimum of two years, as well as meeting EU rules on fiscal and economic management.
"When it comes to the economy and exporters, it is better to enter with a weaker zloty. But when it comes to purchasing power of our salaries, then we are dealing with the opposite expectation," Pawlak said.
"As always there are no clear, simple solutions here. It is necessary to find the golden mean. It (exchange rate) cannot be too far from the current one on the market."
Pawlak also said the strengthening zloty, flirting with an all-time high and up 30 percent since Poland joined the European Union in 2004, was hurting exporters at a time when the global economy was slowing.
"The very strong zloty is stretching some companies to their limits and it seems that in this situation action is needed that could support parameters at levels that help the economy and exports develop," Pawlak said.
He said the government was working on ways on how to minimise transaction costs in foreign currencies. It wants to allow companies, for example, to do its accounting directly in euros rather than zloty.
He also said euro zone entry would not solve "all problems".
"This (euro adoption) must be done in a thought-through way and without the naive hope that euro zone entry alone will fix all the problems," Pawlak said.
"It must also be noted that the euro zone itself ... has much left to do. The stability mechanisms and coordination of member states' policies function more on the basis of 'I give my word' rather than on the basis of stable cooperation principles."


Re: Poland could hold referendum on euro

"Conservatives" - same old problem of labels.

Poland has soft-left conservatives - PiS
Pro-crime rightwingers - PO
Rightwing ex-communists (thank you for cutting my tax from 40 to 19%)

Re: Poland could hold referendum on euro

Once the Grauniad, always the Grauniad

Re: Poland could hold referendum on euro

Guardian - a left-wing paper owned by cut-throat highly-leveraged capitalists. A whiff of hypocrisy perhaps?