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Poland may adopt euro in 2012 at earliest

WARSAW - Poland may be ready to adopt the euro in 2012-2013 at the earliest if it seen benefiting the economy, central bank chief Slawomir Skrzypek said on Monday.

Skrzypek added that once a decision is made on when to join the euro zone, the zloty should be pegged to the single currency in the pre-euro ERM-2 exchange rate mechanism for as short as possible.

‘If the balance of costs and benefits will be positive, then 2012 or 2013 are the earliest possible dates for euro adoption,’ Skrzypek told reporters.

The government plans to meet all the euro entry requirements in 2009, making 2012 the earliest possible date given that in order to join the euro club, the zloty must prove it is a stable currency in the ERM-2 mechanism.

‘The ERM-2 mechanism is troublesome. Should a decision about adopting euro be made, I would like Poland to remain in it for the shortest time possible,’ Skrzypek said.

Currencies should be pegged in the ERM-2 mechanism for two years before switched into the euro.

The central bank has yet to present its final view on the country’s euro adoption prospects and is currently working on a cost and benefits’ report, expected to be released in the autumn of 2008.

Poland currently meets most of the requirements for adopting the euro, with the general government deficit being the most troublesome.

According to the government’s latest convergence plan, the general government deficit will drop below the required limit of 3 percent gross domestic product in 2009.