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4/7/13

Poland: NBP chief wants EU to exempt Poland from ERM2 test

Poland should demand an exemption from mandatory 2 years of maintaining a stable zloty exchange rate to the euro before it joins the euro zone, NBP chief Marek Belka told a conference of experts and politicians who met with President Komorowski.

Komorowski believes that Poland could win such "exceptional terms" from the EU but under conditions that "will require a lot of hard work."

Most of the economists taking part in the conference titled "Ways to Durable Fulfilment of Nominal Criteria of Euro Zone" were largely in favour of Poland's adoption of the common currency.

NBP chief Marek Belka said the ERM2 mechanism was "a very serious barrier that will make it impossible for Poland (...) to enter the euro zone." "Poland should state explicitly that it will not enter ERM2 (...) If you want Poland in the euro zone - drop that requirement," said Belka of the EU.

NBP chief Marek Belka said the ERM2 mechanism was "a very serious barrier that will make it impossible for Poland (...) to enter the euro zone." "Poland should state explicitly that it will not enter ERM2 (...) If you want Poland in the euro zone - drop that requirement," said Belka of the EU.

He explained that entering the ERM 2 mechanism and staying in it for 2 years would be very dangerous for Poland because it had a large foreign exchange market, larger than for instance Brazil. Poland's declaration of defending the exchange rate of the zloty in any fixed bracket would expose it to potential speculative attacks. "It would be like inviting all world investors to speculate against the zloty," he warned.

Belka admitted he was aware that EU treaties ruled out a possibility to enter the euro zone without prior stay in ERM 2, but he stressed that it was always possible to interpret treaty provisions flexibly.

Read more: Polska Agencja Prasowa

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