Economic crisis hits euro plans
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The financial crisis is putting a spanner in the works of Eastern European countries' plans to adopt the euro. Countries like Estonia are being warned by the IMF that they are not meeting the necessary targets, while others such as Poland are admitting defeat and putting back their joining dates.
Poland’s Prime Minister Donald Tusk has now said that 2015 is a realistic date for his country to adopt the euro.
“Poland will meet Maastricht euro-entry criteria by 2015, which makes the country's adoption of the common currency by that year a realistic goal,” Prime Minister Donald Tusk has told French TV. [This] is not a particularly over-ambitious goal," he added.
Given that Poland is the EU nation least affected by the economic crisis – the economy is expected to grow by 1.5 percent this year, the only nation of the 27 nation bloc which will record positive growth – this new date shows how badly the global recession has hit plans to expand the eurozone.
In spring this year, Poland entered into talks with the European Central Bank on entering the ERM-2 – the first step toward adopting the European currency. But the state budget ballooned and the Polish currency, the zloty, weakened considerably, scuppering the government’s plans to take up the euro in 2012.
Rising deficits and debt mean that all central and eastern European countries - except Slovakia and Slovenia which already use the euro - are struggling to meet the strict criteria to qualify to adopt the euro.
Estonia’s government has been warned by the International Monetary Fund that it should reduce its 2010 budget deficit if it wants to stay in line to adopt the euro next year. “Slacking off at the finish line would be an unforgivable mistake,” said Christoph Rosenberg, the IMF’s senior regional representative for Central Europe and the Baltics.
Estonia is currently suffering the worst out of all the EU countries from the financal crisis. Critics say that further cuts in government spending could endanger the economy’s chances of recovery.
