Poland Won't Join "Burning" Eurozone

July 27, 2015

Former Polish Prime Minister Marek Belka, now the head of the Polish central bank, in an interview with the Telegraph, was asked about Poland joining the eurozone. "You shouldn't rush when there is still smoke coming from a house that was burning...It is simply not safe to do so. As long as the eurozone has problems with some of its own members, don't expect us to be enthusiastic about joining."

Belka, also a former Finance Minister and head of the IMF's Europe Department, said that Greece must have debt relief or there will be no "sustainable growth" and "Greece will periodically fall into problems."

Belka also expressed Poland's deep concern about the emerging right-wing forces in Europe: "If we have a political change more into the right, then the enthusiasm to join the euro is going to be even weaker." Earlier this week, Polish politician Miroslaw Orzechowski said that right-wing forces were "flourishing in contemporary circumstances in Europe...[and that]...Right Sector is especially dangerous."

Belka indicated that there may be a break-up of the Eurozone along north-south lines due to the debt crisis:

"The more divergent the euro members are, the more difficult it is politically and economically to build such a union. I'm sure there will be no problem in setting up a fiscal union of some sort between countries of the north — so as long as there is divergence or as long as we have problems in some countries, it's more difficult to build up a solid foundation for the real fiscal union in the eurozone."

He also warned that Europe would not be able to handle the next crisis: "We have used so much of our war chest to fight the former crisis that it would be difficult to fight another one. We don't have the option of decreasing interest rates. Much fewer countries have fiscal space to intervene, so we are less prepared."