Feeling Shaky? Join the Euro!

A quick note here on the latest entry on The Economist’s “Eastern approaches” blog entitled “Poland’s foreign policy: A shaky compass.” (Subscription required – well, you do get to look at one article per month for free, make it this one!)

The point here is that Poland’s Foreign Minister Radosław Sikorski sees his country’s swift adoption of the euro as a needed response to the turmoil to the East. From the article:

Ditching earlier concerns by former finance minister Jacek Rostowski, Mr Sikorski called for Poland to move rapidly to adopt the euro – the last core European institution to which Warsaw does not yet belong. “The decision about the eventual adoption of the common currency will not have just a financial and economic character, but rather it will be mainly political, dealing with our security,” said Mr Sikorski.

This view has yet to gain much traction. . . . Recent polls show about two-thirds of Poles opposed to joining the euro.

First let me note that Poland has a treaty obligation to join the euro, under terms of its 2004 accession to the European Union. But then let me add that this is an obligation to do so eventually, and that Poland will not be allowed in until its economy and the złoty pass a number of real-world tests – something over which any Polish government will naturally have a great degree of control.

But there is a larger point here, which is the strange continued attraction of the euro to certain (EU and non-EU) countries, even while other member-states regret it and some are indeed seriously suffering under it. That attraction is self-evident in the accession to the euro of Estonia in 2011 and Latvia just this past January 1. And now we have Poland – or at least that country’s Foreign Minister.

Can his assertion really be true that adoption of the euro will help strengthen Polish security? It really seems unlikely. Surely a more profound discussion is to be had concerning under what circumstances Eurozone membership really can benefit a country. It’s possible that such a discussion would sooner be characterized by many economists as a “reminder,” but surely things that we thought we knew along those lines need to be reassessed in light of the terrible track-record since the outbreak of the European sovereign debt crisis in 2009. And soon, please: Lithuania is all set to join its fellow Baltic states in the Eurozone as of January 1 of next year.

Meanwhile, beware of hysterical Polish political discourse. I don’t necessarily mean Mr. Sikorski’s assertions quoted above; I rather mean this from the end of that Economist piece: “[Polish Premier] Mr Tusk on Friday said that some members of the opposition, with their Eurosceptic views, posed a ‘mortal danger to Poland.'”

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