Poland has been a member of the European Union since 2004, but has not decided to join the monetary union yet. Have Poland benefited or lost from this decision? For the last two years, starting from the COVID-19 pandemic, the Polish zloty, like other currencies of Central European countries, has been significantly depreciated.
The European Commission has proposed to make EUR 750 billion available as a joint fund to be borne by the EU for the recovery of Member States whose economies have been severely damaged by the COVID-19 crisis.
In August, the Bulgarian government adopted a detailed action plan for joining ERM II and the Banking Union and there were some changes1 to the Bulgarian National Bank Act that also seem to lead in this general direction.
The presentation of the recently published ECB and EC reports was highly anticipated by Bulgarians, as the Bulgarian government’s intention is to officially sign up for the eurozone waiting room by the end of June.
Bulgaria’s accession to the Eurozone became again a part of public discourse, after the minister of finance of the first Borisov government gave up on it in 2012. This will without a doubt bring opportunities as well as threats for the economy, and more often than not opinions are polarized.
For Poland, introducing euro is, strategically, a very important step. The discussion (so far only theoretical) is conducted in two areas. First, a political debate is devoted to the direction of our integration. There is, however, a second debate – a strictly economic one.
Following the Greek tragedy, there is a search for ways to prevent crises of similar magnitude from happening. Different state representatives are coming up with different solutions on how best handle such situations. What the eurozone needs are more voices advocating for the benefits of competition.
The euro indeed plays a major role in the Greek drama, but the ultimate cause of the Greek economic turmoil lies somewhere else. The real problem is that the architects of the euro used it as a turbo that was meant to speed up the integration engine of the eurozone, while encouraging other European countries to do so as well.
We are witnessing the EU’s declining normative influence in three levels: inner circle of membership, middle circle of prospective members and outer circle of neighbourhood, and is expressed in the primacy of hard core economics, the weaker promotion of democracy, the inefficient political conditionality and the gradual realisation that illiberalism is becoming a threatening part of several national competitive politics.
I don’t believe that we need central banking, monetary policy or our national monetary unit. Without this, we can’t avoid two essential problems – politicization of the monetary politics and also its competitiveness. But by saying this I do not wish to imply that in this particular case of devaluation of the lari the central banking system was the major problem. Quite the opposite.