Poland’s head of its central bank (NBP), Adam Glapiński, spoke at a press conference over the weekend where he revealed that there is intense pressure for Poland to join the eurozone but that he would resist. “As long as I am the head of the NBP, Poland will not enter the eurozone,” he declared.
“There is huge pressure from one of our neighbors to introduce the euro and for Poland to participate in the creation of a European state,” said the central bank head, adding that “this country seems willing to lobby hard” among Polish politicians to that effect. Commentators agreed that Glapiński mentioned Germany.
Glapiński believes that introducing the euro could have negative consequences for Poland’s finances, thereby making it very hard for the country to be able to afford the weapons it needs for security purposes. He believes that Poland must be free to conduct its own monetary policy in order to protect growth and employment. He additionally felt that the advocates of introducing the euro to Poland are furious about him being reelected as the head of NBP, as they know he will block any such notion.
Commenting on monetary policy, Glapiński said he felt there was room for appreciation of the Polish zloty (PLN) and that this was beginning to take place. But on Thursday, the central bank raised interest rates by 50 basis points, lifting the benchmark rate to 6.5 percent; this was less than the market had expected, and the zloty weakened.
According to economists at ING Bank, the modest rise in interest rates may result in the zloty depreciating enough for the central bank to hike rates further. But they fear that NBP’s interventions on money markets may not be successful in the longer term.