Poland without the euro : a cost benefit analysis

Abstract

This report deals with the question of adopting the euro in Poland. It differs from previous such works in two respects. First, our question is not “should Poland adopt the euro?” as the EU Treaties oblige all Member States who joined the EU after the Maastricht Treaty came into force to join the eurozone. Hence, we focus on the implications of Poland's decision to delay its adoption of the common currency. Second, in contrast to previous studies we distinguish between different types of costs and benefits – we identify those which are measurable, those which are potential and those which are non-measurable, i.e. are of socio-political nature. In our view such a distinction is required to assess the effects of adopting the euro on the Polish economy in a way which incorporates the possible differences in the preferences of decision-makers and public opinion. Further, we should not treat in the same way those consequences of monetary integration which are certain and easily measurable (e.g. the reduction of transaction costs) and those which are less certain and can only be roughly estimated (e.g. the increase in investment activity or reduction in cost competitiveness of exports).