The conditions for individual countries to join the euro area are laid down in the Treaty of Maastricht of 1992. At the time, in 1992, the common currency seemed an excellent idea, therefore, the Treaty did not impose the time limits for the adoption of the single currency, but set the conditions that the associate States had to meet to be admitted to the euro area. A perfect illustration of specified spirit of the Maastricht Treaty is that Denmark has guaranteed itself an exemption from the work to adopt the euro. For another EU members, the Treaty did not set a circumstantial agenda for joining the euro area and left associate States to make their own strategies and timetables. So, on the 1 hand, the Treaty imposed an work to adopt the euro, but on the another hand it did not impose any deadlines. A strategy could so be adopted that, yes, we would accept the euro but "for holy never" (Ad Kalendas Graecas).
As over time, the applicable effects of joining the euro area have proved to be at least controversial for many countries - mainly Germany and others have lost - as many as 7 associate States have adopted a strategy to postpone decisions to "holy never". In addition to Denmark, Sweden, Bulgaria, the Czech Republic, Romania, Hungary and Poland. It is worth noting that a referendum was held in Denmark in 2010 in which 53.2% of the population rejected the thought of introducing the euro, effectively blocking specified ideas for the future. Sweden besides had a referendum on this issue (2003) and 55.9% of citizens denied the anticipation of joining the euro area.
Why is this happening? due to the fact that adopting the euro means depriving associate States of their economical impact through changes Exchange rate and interest rates. This is depriving yourself of the main tools to defend your economy erstwhile a country loses its competitiveness in global markets. Once, many years ago, I heard a very simple and wise assessment of the thought of a single currency presented by an economist, whose name I unfortunately did not remember. He stated that the single currency should be the final final phase in the integration of the economies of all associate States. The final consequence of integration, not the way to accomplish this integration. Despite this apparent diagnosis, the discussion about Poland's adoption of the euro has one more time intensified.
I am very amazed that in this discussiondoes not address the basic issueand possibly even crucial for a sound assessment of the consequences of adopting the euro. Why doesn't anyone ask, at which rate would we accept the euro? What would be the conversion of our currency into a common EU currency? And this is simply a fundamental question regarding the future of the Polish economy. I'll take an example here. Let us presume that the Polish entrepreneur has contracted sales of goods to the euro area country of EUR 100 000 per month. Let us presume that the costs of this entrepreneur are PLN 400 1000 in Poland. After the payment of 100 1000 euro at the exchange rate of 4.5 (the average rate of the last 4 years), its income will be PLN 450 thousand, which gives about 10% profit of PLN 50,000.
Let us now consider 2 scenarios for the adoption of the euro by Poland: at a conversion rate of PLN 3.5 and PLN 5.5 per euro.
Scenario 1 conversion origin 3,5: the costs of the entrepreneur PLN 400 1000 converted into euro will amount to EUR 114 286
Scenario 2 converted 5.5: the costs of the entrepreneur PLN 400 1000 converted into euro will amount to EUR 72 727
In the first scenario The costs of the Polish entrepreneur will exceed the agreed selling price. The entrepreneur will gotta rise the price and may fall out of the marketplace where he has been successful so far. In script two The entrepreneur will accomplish an additional profit or lower the sales price, making it even more competitive in the abroad marketplace and expanding sales. Yes, there will be opponents who will argue that after converting gold into euro at a low rate (example 3.5), they will be able to afford abroad holidays and voyages across Europe. But specified a converter will ruin the Polish economy completely and as a consequence of advanced unemployment fewer people will be able to afford abroad trips despite the seemingly favorable euro conversion.
After reading and examining these examples, 1 can say that both scenarios are extreme, unrealistic, that the euro rate is decided by the marketplace and the conversion of the euro at the entrance of Poland into the euro area will besides be decided by the market. But specified belief in marketplace law is childish naivety. It is worth reminding of the events of September 16, 1992. That day George Soros conducted a speculative attack on the British pound. The massive sale of the British currency led to a 25% decrease in the value of the pound compared to the US dollar and 15% compared to the German brand. The desperate defence of the pound by the Bank of England has been useless. The British Treasury lost £3.4 billion on these activities and George Soros himself earned about $1.4 billion. As you can see, “healthy” marketplace mechanisms do not always find exchange rates. The rate of gold can besides be artificially raised, so that Poland adopts the euro at an allegedly marketplace rate, which is actually destructive to the Polish economy. We had an example right after the October 15, 2023 election. Over a short period of time, the euro has been strengthened by about 30 cents, although no economical decisions have been made, the fresh government has not yet taken power, but it was not even certain that opposition groups against the right would be able to agree a coalition agreement. Today, despite rising inflation, rising unemployment and the economical stagnation of the euro against marketplace logic, it continues to strengthen. Is it a case or do any speculators dream that Poland will accept the euro after the least favorable course?
The mechanics of artificial strengthening of the gold was observed in September 2008, erstwhile Donald Tusk announced Poland's entry into the euro area until 2011. Within a specified 5 minutes After that statement, a goldsmith She's been strengthened by 8 cents. (from 3.47 to 3.39). She got stronger, not weaker. It is besides characteristic that during the governments of the PO (2007 – 2015) the gold was stronger than the regulation of the Right (2015 – 2023). It is worth briefly describing a marketplace mechanics that naturally regulates exchange rates. The more the country exports, the more abroad currency sales and acquisition transactions by exporting traders. The more there are specified transactions, the more the local currency rate is strengthened and if it becomes besides strong, exports cease to be profitable and the economy sinks into crisis. It is profitable to import, which makes it essential to sale the local currency and acquisition the currency, the local currency weakens and we have the other process. As you can see, it is not a strong, but a weak own currency that promotes economical development. The Chinese knew this very well, which is why China artificially introduced the rigid course of its yuan to the US dollar at a very, very low level. As a result, despite the fast improvement and force on the emergence of the yuan course, this – as a consequence of a political decision – remained low. Chinese products were invariably very cheap, despite the tremendous growth of the Chinese economy and the increasing exports. This has become the reason for the conflict between the US and China. The United States has exerted tremendous force on China to release the yuan course.
In addition to the "invisible hand of the market", speculative actions and political decisions can influence exchange rates. If Poland does not accept the euro, of course, it will besides be exposed to specified speculative attacks strengthening the artificially course of gold. But through the actions of the National Bank of Poland we will at least be able to effort to defend ourselves. However, if we accept the euro with an unfavourable conversion rate, we will surely lose, and without a fight, at a alleged "green table". Therefore, erstwhile talking to another people, talking to politicians, especially those candidates for the Euro-Parliament, let us not ask them whether they are in favour or against the adoption of the euro by Poland. In response, we will hear long arguments that do nothing to the case. Let's talk one short question, what course they say the gold should be converted after the possible accession of Poland to the euro area. The answer to this 1 simple question will let us to identify whether our interlocutor, whether a given politician cares about the interests of Poland or the interests of abroad powermen.
Mr Bogdan
