Poland, Czech Republic Won't Join "Burning" Euro

Tyler Durden's picture

With the turmoil in Greece proving once and for all that in the absence of a fiscal union, the EMU simply cannot function or if it does, it will be subject to episodic crises stemming from endemic differences of opinion on fiscal policy, outsiders could be forgiven for looking upon the currency experiment as an abject failure. 

Indeed, the struggle to secure a bridge loan for Athens last week underscored the degree to which non-euro countries are reluctant to put their taxpayers on the hook for problems which they believe are the result of an ill-fated attempt to unite fundamentally different economies and governments under a single currency. 

Given the above, we weren’t surprised to learn that Poland and the Czech Republic are out voicing their reservations about running into what is effectively a burning building. Here’s The Telegraph on Poland:

Poland will not join the euro while the bloc remains in danger of "burning", its central bank governor said.

 

Marek Belka, who has also served as the country’s prime minister, said the turmoil in Greece had weakened confidence in the single currency.

 

"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," he said. 

 


 

The governor suggested that Poland, which is obliged to join the euro as part of its EU membership, would not become a member for many years. He said interest would wane further if the political environment continued to shift to the Right. 

 

Mr Belka, a former head of the International Monetary Fund’s European division, said the eurozone was at risk of becoming trapped in a “vicious circle” where closer fiscal integration became more difficult because of splits over structural reforms and austerity.

And from Bloomberg on the Czechs:

Czechs should postpone euro adoption until Greece leaves currency bloc, Czech President Milos Zeman told Mlada Fronta Dnes.

 

While "Greece is a eurozone member and other taxpayers including Czechs, would pay for its debt, I’m for postponing the euro adoption. Until Greece leaves the eurozone. I wish it would happen as early as possible."

So while Poland supports Greek debt relief - and, as you’ll see in the interview excerpts below, opposes a further shift towards the fiscal doctrines of the EMU’s northern bloc - while the Czechs apparently want Greece out sooner rather than later, one thing they agree on is that charging into a burning building is a bad idea and as we’ve been keen to point out for the better part of three years, the EU is certainly on fire. 

*  *  *

Full interview with Poland’s Marek Belka as originally posted in The Telegraph:

What do you think about the situation in Greece?

I think that what has been achieved provides temporary respite but not a solution. The real problem for Greece is how to reinvigorate sustainable growth. Without sustainable growth Greece will periodically fall into problems. But of course we expect that the reforms are going in a good direction. The problem is that normally it takes a lot of time for these reforms to have positive consequences.

Do you believe that Greece needs debt relief?

I would call it a debt reprofiling, rather than debt relief which is the same but sounds better and politically more acceptable. Either way, I think at one point sooner or later Greece needs it.

What are the chances of Poland joining the euro?

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.

Does the eurozone need fiscal union to ensure it survives?

I think it does. I don’t think the euro area is solid enough without some elements of fiscal union. The only problem is, 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. So this is a little bit of a vicious circle, but this is how we see it from our side.

What needs to happen in the eurozone to make it attractive for Poland to join?

The eurozone needs to grow solidly and build up a solid foundation for its currency, including elements of fiscal union and common economic policy. This is something that we cannot say fully determine upfront. It’s more of a moving target.

What is the mood music like in Poland for joining the euro?

The situation around Greece does not increase confidence in the euro, that’s for sure, and if we have a political change more into the right, then the enthusiasm to join the euro is going to be even weaker.

How long will it take for the eurozone to fix its problems. Can it be done within a generation?

We don’t have as much time as a generation. But it will take a while.

What does your time working at the IMF tell you about its role in the debt crisis?

I think it was quite unusual for the IMF to be part of a team of three, rather than doing it on its own. The programme was a compromise between what the IMF thought was most proper and the exigencies of European integration. So this is an uneasy alliance in the sense that the priorities of Brussels might be slightly different than the priorities of Washington. So it’s an uneasy task and unusual task. But on the other hand how can the IMF ignore the situation in Greece and other European countries? This would make the IMF less relevant in the world. So this is the product of certain circumstances and compromises.

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PartysOver's picture

Bizarro, Poland doing something right.  The End Times are nigh.

Looney's picture

Here’s an interesting fact about the EU.

Lithuania, a small Baltic country, just a few years ago had almost 3 million people.

TODAY, it has less than 1.5 million.

Even countries living through terrible events like wars, Ebola, natural disasters, even genocide have never lost a half of their population.

Oh, and the country’s president, Dalia Grybauskaite blames it all on… global warming!  ;-)

Looney

P.S. Here’s Dalia’s CNN profile: http://ireport.cnn.com/docs/DOC-1230073

insanelysane's picture

Whatever happened to the phrase "the more the merrier"???

Rubicon's picture

There is no way Poland will take the Euro. He is being very diplomatic.

 

I should know, im not Polish. But I do live here.

Klemens's picture
Klemens (not verified) Looney Jul 27, 2015 1:06 PM
What you always wanted to know about the ‘Brussels EU’ –
But no one dared to tell you

http://www.relay-of-life.org/main.html

The EURO is made by Satans Banksters!

Ajax_USB_Port_Repair_Service_'s picture

I can't find credible documentation that shows Lithuania's population is down to 1.5 million. Looks like 3 million to me.

Froman's picture

If it is in fact down to 1.5mm then load up 10 Carnival Cruise line ships with Mexicans and Free Stuff Army members and ship their happy asses to La Lithuania.

Looney's picture

Here's a link to the EuroStat:

http://ec.europa.eu/eurostat/web/population-demography-migration-projections/statistics-illustrated

Their population growth projections are 1.8 million by the year 2080.

Looney

Ajax_USB_Port_Repair_Service_'s picture

O.K. your link is a "what if" for the year 2080. Population of Lithuania RIGHT NOW is about 3 million. 

A Nanny Moose's picture

<- Political Refugees

<- Genocide

Tarshatha's picture

Perhaps they had a bad potatoe crop.

lincolnsteffens's picture

Is that you Dan Quayle?? Still haven't learned how to spell yet!

TheObsoleteMan's picture

Considering that country's history of almost non-stop occupation by other countries, I would get the hell out too while I still could.

KnuckleDragger-X's picture

Poland has a lot of experience being beat down, they've just decided that sitting on the sidelines while pointing and laughing is more fun.....

monkeys.pick.bottoms's picture

@PartysOver We Poles like to say the same thing but that's not completely accurate. Poland is negotiating to join the AIIB bank. Also, we have a back up currency system of gold and silver coins:) So, I'm afraid the joke, so far, is not on Poland

scraping_by's picture

Careful what happens behind closed doors. Your back up currency sounds like something bankers want on the table, sooner or later.

Jack Burton's picture

Agreed! If even Poland can see the Euro disaster, then it is obvious to all.

squint's picture

"If even Poland can see" through the safety of flu vaccinations then why didn't any other European country.

 

"Poland is the only country known to have refused H1N1 swine flu vaccines due to safety concerns."
giovanni_f's picture

Was a mistake to accept Poland in EU and Nato. Good that they find out for themselves that EUR is to ambitious for them.

JJdog's picture

This proves Polish are not stupid! Should change all the Polish stupid jokes to the Greeks

TheObsoleteMan's picture

Poles were never stupid, just gullible and naive. They trusted Britain and France in 1939, and it cost them their country TWICE, first when France and Britain sat back and watched Hitler and Stalin carve it up, then just six years later FDR and Churchill basically ceded to Stalin that which was not theirs to give {Poland}. Just imagine, Poland was an ally, and yet they were treated the same as if they had been the enemy.

giovanni_f's picture

Besides, the Poles suffer from a eternal, gargantuan complex of inferiority and hatred versus the Russians. That makes them useful idiots for the US and UK war mongers.  I call this terminal stupidity.

squint's picture

Agree with useful but idiots is harsh.

You must have heard the expression "between rock and a hard place", that has been Poland's geopolitical situation between Germany and Russia. Having been collectively invaded and partitioned three times by Russia, Prussia and Austria and wiped off, of the European map for couple of hundred years, may have resulted in long memories.

Thanks to the Americans, they are not living like dispersed Kurds and may crawl out yet from their shacles.

 

squint's picture

Last time I looked the Poles overwhelmingly refused to join the Euro. It's not that it is too ambitious for them, maybe they just foresaw too many pitfalls.

To have such diverse economies ie. Germany and Greece and expect the same monetary policy to work for both is either folly or design for takeover .......... maybe they are not as stupid as some think here.

Panic Mode's picture

3, 2, 1. Government Ctrl-Alt-Del

10mm's picture

Good for the Czechs. And keep making great pistols.

keremetski's picture

So, they will join aftet Grexit and pay for Italy, Spain and France debt???

TheObsoleteMan's picture

You can keep their guns and beer, I'll take their world renown women!

mojojojo's picture

Without treasury instruments funding deficits, tax increases would have to be used to fund wars. Not so popular!

mojojojo's picture

Commercial bank money doesn't exist as a note or a coin. Love live bankers!

detached.amusement's picture

the sooner all centralized monetary issuing authorities disappear from the face of the planet, the sooner the world heals from its apparently terminal case so far

TheMuppet's picture

The Czech president's comments are particularly arrogant given that Poland and Czech R. are already effectively semi-colonies of Germany.  Far from "bailing out" other countries, they just don't want to be locked up in the same Eurozone torture chamber down in the celler with Greece!

RaceToTheBottom's picture

I think that you mean something other than arrogant.  If they were arrogant, they cannot be a lackie of Germany, since they are effectivly agreeing with Germany about expecting some stronger fiscal responsibility from Greece.  

They are very sensitive about having their citizens make less than Greek citizens and then have to bail Greek out on top of it.

Cold-Pragmatism's picture

Frankly, nobody should join the Euro Club until, France, Italy, Spain and Portugal put their fiscal houses in order too!

TBT or not TBT's picture

And they should stay put of the open borders pact too, until the same countries halt their influx of Muslims and barbarians of all origins, and somehow relaunch native birth rates.   Fiscal health will be impossible in those countries in demographic death spirals when their replacement populations are Islam and Arab culture infested.  Ain't gonna happen.  

rwe2late's picture

 People from Africa and the Mideast will continue to

emigrate (flee) to Europe so long as NATO, under US guidance,

continues to wreak havoc and destruction abroad,

and lends support to jihadist tyrants and apartheid expansion.

RaceToTheBottom's picture

Interesting, so Czech and Poland want more EU Fiscal control before they join.

 

This may have been the German plan all along, and GS handpicked Greece cause they knew how Greece would react.  

This is the shock that gets countries to give up their fiscal sovereignty.

 

insanelysane's picture

Will eventually adopt the Euro?

Will see what deal Russia gives Greece and rejoin Russia?

847328_3527's picture

Poles and Czechs won't be joining ?!............................Tear-rists!

 

Must freeze their bank assets in the EU and USA...confiscate all thier overseas property and slap them with an embargo!

Racer's picture

I would call it a debt reprofiling, rather than debt relief which is the same but sounds better and politically more acceptable.

ROFLMAO of course, politicians don't call a spade a spade, the sheeple might rise up!


DutchBoy2015's picture
DutchBoy2015 (not verified) Jul 27, 2015 1:14 PM

TTIP is making ALL EU countries sit up and take notice.   Everyone I speak with is sick of Brussels trying to dictate to us.  people  want to keep their sovereignty.

And Monsanto, GMO are hot topics over here.

Russia outright BANNED all GMO crap.

The bullshit scientists in the USA are on Monsanto's payroll saying they are safe.

Fuck TTIP and TPP.  both conjured up to rule the world via corporations.

Bemused Observer's picture

The only way fiscal union can help these people is if they are willing to support their weaker members, and to rescue any members who fall on hard times..........

BWAA HAA HAA HAA!

Euro fail in 10, 9, 8....

williambanzai7's picture

Someone explain again how much skin Tusk has in the game?