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A euro coin and zlotys
Image: picture-alliance/dpa/P. Pleul

Poles choose zloty over euro

Rafal Kiepuszewski, Warsaw
August 26, 2015

In the wake of the Greek crisis, Poles oppose joining the euro. Poland's conservatives have made preventing euro adoption their focus this election year. They are leading in the polls, says Rafal Kiepuszewski in Warsaw.


On the campaign trail, Beata Szydlo, deputy leader of Poland's main opposition conservative Law and Justice (PIS) party, has called on Polish Premier Ewa Kopacz to "abandon the idea of euro adoption." Szydlo, who has been tapped for the post of prime minister if the right-wing coalition wins the election, said recently at a news conference in Warsaw that her government's first decision would be to close down the office responsible for Poland adopting the euro.

The latest polls give the PIS 40 percent of the vote, with Kopacz's ruling liberal Civic Platform (PO) party trailing behind them at 28 percent.

Szydlo's sentiments are echoed by the country's Poland swears in conservative lawyer Andrzej Duda as presidentnewly inaugurated President Andrzej Duda, formerly a PIS MP, who scored a surprising win last May. During his campaign he repeatedly said that the national currency, the zloty, "provides a cushion at the time of the eurozone crisis, and the euro means higher prices." He made it clear that until the earnings of average Poles reach "European levels," he would not agree to the introduction of the currency in Poland.

According to the Central Statistical Office, the average gross monthly wage is 3,854 zlotys (912 euros; $1,48), four times less than in Germany.

Euro support tumbles

Polls show that in the wake of the Greek crisis, the Poles, who were once enthusiastic about the euro, have turned against the European currency. Over the decade since Poland joined the EU, in 2004, more than half of the electorate steadily supported adopting the euro. But now 54 percent of Poles have turned against it. "I'm really afraid that like Slovakia and the Baltic states, which are part of the eurozone, but aren't as wealthy as the older member states, Poland will also be forced to pay for financial instability in the south of Europe," one Warsaw student told DW.

Faced with such public fears, even the ruling PO party, once strong supporters of the euro, appears to have put the issue on the back burner. Prime Minister Kopacz rarely mentions the euro in her campaign, she has said that "euro adoption is probably at least five years off."

Ewa Kopacz
Prime Minister Kopacz has taken to only rarely mentioning the euro.Image: picture-alliance/epa/O. Hoslet

However, Foreign Minister Grzegorz Schetyna told a news conference in Warsaw last week that "a Europe of two speeds" was not in Poland's interests and that "the Greek crisis does not mark the end of discussions about introducing the euro in Poland." Schetyna said he hoped that "young Poles will see the issue from the point of view of those who benefit from open borders and the free flow of capital the EU offers."

Referendum about-turn?

The PIS's veteran leader, Jaroslaw Kaczynski, who served as prime minister from 2006 to 2007, has long advocated the idea of a referendum on euro adoption. However, while he remains the party's chief strategist, Kaczynski has kept a low profile during the current election campaign, to put the spotlight on younger PIS politicians in a bid to appeal to younger voters.

Yet those leaders appear to differ on the referendum idea. Krzysztof Szczerski, President Duda's foreign policy advisor, told Reuters that "Poles should decide in a referendum whether they want to embrace the euro." Meanwhile, speaking to journalists in parliament last month Beata Szydlo strongly hinted that the country was not ready for a referendum.

Strong economy, uncertain prospects

When the PIS was last in power, it had a difficult relationship with Polish business circles and was criticized by the opposition for its often controversial policies toward the EU. Many in the private sector now fear its current election promises to lower the retirement age - which had been raised by the liberal-led government for demographic reasons - increase social spending, curb privatization and introduce a levy on banks.

Credit ratings agencies such as Standard & Poor's have consistently given Poland good marks for "strong macroeconomic foundations," with average annual GDP growth of 4.19 percent per year over the past 20 years, among the highest in Europe.

Beata Szydlo
Szydlo may want to avoid the euro, but ultimately Poland is obliged to adopt itImage: picture-alliance/AP Photo/C. Sokolowski

But can these trends be maintained if the export-driven Polish economy - whose most important export market is the EU - is kept out of the eurozone? "Polish exports have been growing annually at around 5 percent in the past few years," Jan Sosna, a business analyst at "Polish Market" magazine, told DW.

"In the short term, the fact that the zloty is not tied to the euro has often helped increase the competitiveness of Polish exports. But in the long run, exporters are bound to lobby for euro adoption to cut conversion costs and make planning more predictable."

Admittedly, Poland does not quite meet all the Maastricht criteria for euro adoption, though it is obliged to eventually join the currency union. In particular, it could do more to balance public finances, Sosna says.

When it comes to the PIS's economic program, including its doubts about the euro, business analysts are left with a lot of unanswered questions.

"For Poland to maintain its current high level of foreign direct investment, it is essential that it keeps getting good ratings from Standard & Poor's and other agencies," says Sosna. "And their number one criterion is political stability." The question is whether the concept of political stability as understood by the PIS matches that of international rating agencies.

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