Poland Takes Another Chance to Hit Out at the Euro

(Bloomberg) --

Poland’s central bank is throwing its weight behind the government’s bid to keep the country out of the euro.

A conference Wednesday, four days before European Parliament elections, opened with a speech by Governor Adam Glapinski entitled “The Polish Zloty Means a Strong Polish Economy.” It’s not the first time he’s talked down the common currency. But it chimes with government calls for parties to commit to the zloty until prosperity matches that of Germany.

“There are no good arguments for the euro,” Glapinski said at the conference. Adopting the euro carries “high costs and vague benefits,” he said.

Like other ex-communist nations that have joined the European Union since 2004, Poland has agreed to eventually adopt the single currency. Five already have, and more recent entrants including Bulgaria and Croatia are keen. But Poland, like Hungary and the Czech Republic, isn’t rushing. Indeed, retaining the zloty helped keep its $526 billion economy growing throughout the global financial crisis -- the only EU member to manage that feat.

Poland Takes Another Chance to Hit Out at the Euro

“We’ll lose out one way or another” if Poland adopts the euro, ruling-party leader Jaroslaw Kaczynski told a rally last month. “We say no to the euro and no to European prices -- we want European wages and we’re backed by a majority of Poles.”

Still, the question of euro membership hasn’t blossomed into a major election topic since no major parties have advocated quick adoption. In his speech, Glapinski said joining the single currency would harm competitiveness, curb economic growth and lead to a “dangerous” jump in indebtedness. Late last year, he accused “euro zealots” of embroiling him in a political scandal to help push Poland into the currency bloc area against his wishes.

The program for Wednesday’s conference features nine speakers, none of which are from outside Poland, let alone from the European Central Bank.

For EU Industry Commissioner Elzbieta Bienkowska, staying out of the euro would mean Poland has no voice on important policy discussions. That could leave the country “side tracked” for generations, she said. Glapinski refuted such thinking, saying that as long as he’s at the helm of the central bank, he won’t allow the country to join the single currency or even the pre-membership ERM-2 currency mechanism.

“It’s difficult to agree with the geo-political argument that the euro would guarantee our economic safety,” the governor said. “This is the result of a strong economy, strong military alliances and the quality of our government.”

If Law & Justice’s thinking wins out, waiting for economic parity with Germany will take some time. Polish per-capita gross domestic product is over two-thirds of the EU average, while Germany is about 25% richer than the baseline. Based on their current growth trajectory, Poland will only catch up with its neighbor in 110 years, according to former central banker Jan Czekaj.

©2019 Bloomberg L.P.

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