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Abstract
Poland’s road to the euro proved bumpy and its early status as a euro pacesetter developed into one of euro laggard. So why, prior to the sovereign debt crisis, did Poland remain among the group of Central and East European countries that had not yet adopted the euro? What are the political barriers for euro adoption in Poland? This paper argues that domestic factors such as the existence of veto points, public opinion, central bank institutional features, and the role of political elites are key to answering the research questions. With the euro crises, the domestic problems were accompanied by declining public support for euro adoption along with an unfavorable external environment that is pushing euro adoption further away.
Notes
1. As of December 1, 2014, Donald Tusk has been the President of the European Council.
2. In addition to the political divisions, we have to keep in mind that the euro crisis has created an unfavorable economic environment such that Poland is further removed from meeting the Maastricht Convergence Criteria.
3. In this article, the New member States (NMS) are the countries that joined the EU in 2004: Cyprus, Estonia, Hungary, Poland, the Czech Republic, Slovenia, Latvia, Lithuania, Malta, and Slovakia.
4. Estonia, Lithuania, and Slovenia joined ERM-2 on June 28, 2004, Latvia joined on May 2, 2005 and Slovakia joined on November 28, 2005.
5. In 2007 Poland met all the criteria except for joining ERM-2. The decision to join ERM-2 was unlikely given that PiS was in power at that time. The parliamentary elections that brought PO to power took place in October 2007.
6. Sadeh and Verdun (Citation2009) offer a good overview of the literature.
7. According to Balcerowicz, moving Poland to a market economy should be done very fast if the economic problems were to be solved, since what was used previously as solutions “such as price controls, ration coupons and centralized distribution would only worsen the problems and delay the cure” (The New York Times, October 7, Citation1989). The transition to a market-based economy could be attained through macroeconomic stabilization, liberalization of prices and eliminating price control, restructuring of institutions (mainly financial and monetary), privatization, and attracting foreign direct investments to Poland (see Belka and Krajewski Citation1995; Poznanski Citation1996).
8. After SRP leader Andrzej Lepper (junior coalition partner with PiS) was implicated in corruption scandals, the Sejm dissolved itself on September 7, 2007. This led to early elections on October 21, 2007, two years before the four-year term ended.
9. Later, the MoF published a report detailing the prerequisites for implementing the next stages of the Road Map (Polish Ministry of Finance, April 2009).
10. Under Poland’s constitution, the speaker of the parliament (Bronislaw Komorowski at the time) takes over the presidential duties until new presidential elections are held within 60 days.
11. Marek Belka was the prime minister of Poland in 2004–5. He also served as a deputy prime minister and minister of finance in 1997 in Włodzimierz Cimoszewicz’s government and in Leszek Miller’s government in 2001–2. He is a technocrat who does not belong to the party system. For more information on Belka, see the National Bank of Poland website at http://www.nbp.pl.
12. RP was founded in October 2010 by a former PO member Janusz Palikut.
13. I believe the reasons for setting a date for euro adoption were as follows: first, to deal with the criticisms of PM Tusk for not implementing any reforms since he became the prime minister (Financial Times, September 10, Citation2008); second, that the announcement “breathed new life” into Tusk and the “ruling Civic Platform” (Financial Times, September 29, Citation2008); and third, “to help calm spooked investors who have been retreating from the Polish zloty as emerging market currencies are buffeted by the global financial crisis” (Financial Times, October 28, 2008b).
14. Slawomir Skrzypek was appointed while PiS was in power in 2007. Skrzypek died with the president in the April 10, 2010, plane crash near Smolensk.
15. By the time of writing, this date is unrealistic since Poland is still not in ERM-2.
16. At the time of writing, the 2016 date seems harder to fulfill since Poland is still not part of ERM-2 in which it has to stay for at least two years in addition to meeting all the other convergence criteria before it can join the euro area.
17. The opposition to euro adoption has been increasing since the euro crisis started. In 2012, around 60 percent of Poles opposed Euro adoption (Wirtualna Polska February 14, 2012) and 58 percent believed that the euro would have negative effect on the Polish economy (Forbes, June 5, Citation2012).
18. PO won the presidency in July 2010 when their candidate, Bronisław Komorowski, won the elections as mentioned earlier. Accordingly, a presidential veto would not block euro adoption since both the president and the government are pro euro.
19. In the 2013 address of the Polish Minister of Foreign Affairs on the goals of the Polish Foreign Ministry, Minister Radosław Sikorski warned about staying outside the euro area, since it would limit the ability of Poland “for manoeuvre. We will thus face a choice: we can either stay in the mainstream of economic, financial, and political integration, or we can stand on the sidelines, squandering the opportunity to achieve faster growth and have our say in EU policies” (Polish Ministry of Foreign Affairs Citation2013, 7–8).
20. The definition of “the best interest of the country” is ambivalent as each group (euroskeptics and euro enthusiasts) have different criteria as to when this condition is met.