The European Union’s monetary affairs chief will soften his recently proposed stance on the Exchange Rate Mechanism 2 (ERM2) for Poland

The European Union’s monetary affairs chief will soften his recently proposed stance on the Exchange Rate Mechanism 2 (ERM2) for Poland as the country begins to show signs that it will meet Maastrict criteria, Warsaw-based economists and market watchers say. Adding confusion to the already scattered debate on the potential for the country to adopt the euro quickly, Pedro Solbes, the EU’s monetary affairs commissioner, declared that accession countries would be forced to abide by a narrow exchange rate band of plus or minus 2.25% to the euro. This threatened, for Poland in particular, the more manageable plus or minus 15% that current euro-zone countries enjoyed after the European Union’s first ERM fell apart in the early 1990s. Critics of this “impossible” clause say Solbes’ statement illustrates the EU’s own fear of being able to swallow 10 new economies – of which Poland’s is the largest – at the same time as some member states record ballooning budget deficits and rising unemployment. Those fears will calm, say economists. “The biggest problem is whether the euro-zone is ready to accept accession countries, in particular Poland,” said Marcin Mróz, senior economist at SG Bank. “Poland has bigger problems. Mainly the problem the EU (has with Poland) is highlighted by the recent statement by monetary affairs commissioner Pedro Solbes, (which aims) to discourage new countries from joining the euro.”