With the tiny island of Cyprus fighting to avoid a messy exit from the euro, it would seem a particularly inauspicious time for Poland, an economic powerhouse of Eastern and Central Europe, to be clamoring to join the currency union.
Yet in what appears to be a calculation that he can convince a skeptical nation to give up the zloty, the Polish prime minister, Donald Tusk, has opened the door to a referendum on joining the euro zone. Analysts warned that the move could backfire amid a growing backlash against the currency stoked by the euro zone’s long-running debt crisis.
“I would be in favor of reaching an agreement to change the Constitution, where there would be a referendum about joining” the euro zone, Mr. Tusk said at a news conference on Tuesday, according to Reuters.
Ever since coming to power in 2007, Mr. Tusk has argued that Poland risks being relegated to the second tier of European decision-making if it remains outside the euro. Analysts said the prime minister was determined to prepare the ground for a national debate on the euro before a possible entry in 2017. Mr. Tusk has indicated that his government would only set a date for euro entry after the next election, which is expected in 2015.
Broaching the referendum issue was also tactical. Mr. Tusk has in the past opposed a demand by Law and Justice, a euro-skeptic opposition party, to hold a popular vote on the euro. Analysts said the prime minister was now raising the possibility of allowing a referendum on the condition that the opposition agree to changes to the Constitution necessary to adopt the currency.
Under the current Constitution, only the zloty can serve as Poland’s currency. Mr. Tusk’s Civic Platform party and its junior coalition partner, the agrarian Polish People’s Party, together lack the two-thirds majority necessary to change the Constitution.
Even though any referendum is likely to be years away, analysts said Mr. Tusk faced an uphill struggle at a time when the crisis in Cyprus had made Poles extremely wary of joining the euro zone and being encumbered with spiraling costs associated with paying for the profligacy of other euro zone nations.
According to a survey conducted this month by TNS Polska, 53 percent of Poles think that adopting the euro would have a negative effect on the country, with 69 percent believing it would adversely affect their households. The margin of error was roughly three percentage points.
Witold Orlowski, a professor of economics at the Warsaw University of Technology Business School and a member of an economic council advising the government, said Mr. Tusk wanted to send a strong signal to Poland’s E.U. partners that the country was determined to be at the heart of the European project, regardless of the challenges ahead.
“Who loves the euro today? Nobody. Of course, there are risks that Poles could vote no in a referendum, and the aim to expand influence could backfire,” he said. But he stressed that for Poland, tugged between Russia and Germany over the centuries, joining the euro was not primarily about economics but about the political imperative of being cemented more firmly to the Union.
But Mr. Orlowski said that not being straitjacketed by the euro’s one-size-fits-all monetary policy had helped Poland to weather the crisis gripping much of the Continent. Those benefits have been somewhat offset by Polish companies’ complaints that being outside the euro zone saddles them with cumbersome and expensive transaction costs.
The Polish economy has proved relatively robust, although it grew by just 2 percent in 2012, down from 4.3 percent in 2011. A flexible exchange rate and tight monetary policy have helped the country to sustain growth while many of its E.U. partners have stagnated or seen their economies shrink.
Among the former communist countries in the Union, Slovakia, Slovenia and Estonia have already adopted the euro, while Latvia has indicated it wants to join as early as 2015. But enthusiasm for the currency is tepid across the former Soviet bloc countries that have yet to join, according to a recent Eurobarometer poll, with 54 percent of people in these countries, which include Hungary, the Czech Republic and Romania, believing the euro would have negative consequences for their countries.
Ryszard Petru, president of the Association of Polish Economists, said it remained doubtful that Law and Justice would agree to the necessary changes in the Constitution, even if that meant securing a referendum on the euro.
But if there were a referendum today, he added, “the no side would win.”
Article source: http://www.nytimes.com/2013/03/28/business/global/poland-affirms-desire-to-join-euro-zone.html?partner=rss&emc=rss