Tuesday, August 16, 2011

Euro at the right moment, meaning never

Waldemar Pawlak, Poland's cagey deputy prime minister, took a page out of the venerable or villainous Margaret Thatcher's book on a holiday Monday in Poland by suggesting he believed Poland should never adopt the euro.

Pawlak, leader of the junior ruling Polish Peasant's Party (PSL), said Poland should ditch the zloty in favour of the euro at the same time as Thatcher said the UK should adopt the euro: 'at the right moment, meaning never.'  Poland is obliged to adopt the euro as a European Union member, though no mandatory time limit is set.

Pawlak also denounced the "blind enthusiasm" of many supporters of euro adoption and said the Civic Platform (PO)-PSL government's entire strategy to adopt the euro as soon as possible should be re-thought from the ground up.

"Currently, the euro-zone is more like a tattered umbrella than a shield that protects against global market turbulence. We need to fundamentally re-think the pros and cons of adopting a common currency," he said.

Pawlak is savvy. He knows which way the wind blows. Poles increasingly believe the euro would be a step back, not forward. Many know the zloty's depreciation in 2009 during the depths of the crisis preceding the one that to come gave a key boost to the economy by making exports more competitive.

All are aware of the euro-zone's current plight, the mad walk from crisis to crisis, the arrogance, the ignorance, the execution of politics like a child having a nightmare: just wishing it would go away.

The senior ruling PO knows this as well. Announcing any target for euro adoption while the mess continues would be idiotic. The recent crisis has shown that countries with competitiveness issues (whether Greece or Portugal or Poland) are better off outside the euro-zone than inside.

Pawlak is very often wrong. On this, he's right. Don't expect Poland to have the euro for at least six or seven years.

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