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Polish here, very much against adopting the euro until our standard of living and growth rate matches Germany (no at least not for next 10 years). Why? Because

Polish here, very much against adopting the euro until our standard of living and growth rate matches Germany (no at least not for next 10 years). Why? Because the disadvantages far out weight the benefits for developing countries. The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation. Surely the monetary policy will follow what is best for the biggest economies (or at best the average) while local policy is way better tweaked towards local needs. The best example of this is money supply. The money supply ideally should match the economy growth rate +X so there is tiny inflation (and definitely no deflation). This growth rate is very different in "old EU" and "new EU" countries. So what happens? In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion. Historically the biggest benefit that was sold as something to outweigh this was a claim that "inflation will be low" and big inflation spikes are impossible. This came about from the short sighted view that all inflation stems from printing money and by giving up our control over it to somebody else we somehow "protect ourselves". This was proven wrong during covid when inflation was vastly different in let's say Latvia and Germany despite sharing a currency. So what is the bottom line? Is euro all bad? No, it is very useful so we have a common currency in the euro zone that is not controlled from across the ocean. This is a huge benefit, but the same benefit is achieved by having it be a second currency like it is now in Poland rather than the only currency. (you can pay in euros in almost everywhere if you prefer as well as get it from cash machines etc)

mytailorisrich 1y ago
Exactly right. The euro has benefited countries like Germany a lot but not necessarily all countries.
- deleted 1y ago
  [deleted]
petre 1y ago
You can't possibly compare Poland to Bulgaria with 1/8 Poland's GDP and 17% its population. For Bulgaria the Euro is completely fine, as the Lev has been pegged to the Deutche Mark and later the Euro for ages. It's exports are basically raw materials and grain. Most of the other stuff they produce is sold domestically. I think I've only seen Bulgarian sunflower oil, mineral water, ketchup and pasta in stores outside the country. For a state with so feeble exports and a pegged currency it really doesn't matter, only adds up currency conversion fees. They might want to attract more tourism and investments.
- ingohelpinger 1y ago
  not true, almost the entire domestic production like veggies is exported and turkish, greece, dutch low quality stocks imported.
  - petre 1y ago
    Yes, but it's still agri products sold for pennies. Compare that to motor vehicles, car parts, furniture and sanitary hardware that Poland exports. Also, I never ate Shopska salad made with Dutch tomatoes in Bulgaria, even in restaurants outside of Sofia. I can tell the difference, they almost always served the good ripe stuff that has taste, not the watery green variety or the huge Greek tomatoes with air gaps inside.
    - ingohelpinger 1y ago
      for penni's, because they are dumping the prices by importing crap, so the local producer cant sell his product on the domestic market.
      - tmcdos 1y ago
        Quite true!
- szszrk 1y ago
  I find his view a bit polarized, but can't really see him comparing those countries at all. But if we talk about Polish-Bulgarian exchanges: Those two countries actually have more or less the same numbers of Euro spent on import and export between each other. Bulgaria doubled export to Poland in just 2 years. Food products are important, but Bulgaria also exports to Poland many metals, mechanical and electrical devices, pharmaceuticals... The biggest Polish import from Bulgaria in 2023 were almost a billion Euro on guns and ammunition. "Seeds and oily fruits" (whatever is the correct translation) were 20x less than that. - https://www.gov.pl/web/bulgaria/informator-ekonomiczny4 https://www.gov.pl/web/bulgaria/informator-ekonomiczny4
guappa 1y ago
Doesn't really matter because being in EU you can't print money, being euros or whatever local currency you have.
- giingyui 1y ago
  https://www.reuters.com/article/world/ecb-to-print-1-trillion-euro-this-year-to-stem-coronavirus-rout-idUSKBN21606O/ https://www.reuters.com/article/world/ecb-to-print-1-trillio...
  - guappa 1y ago
    And? A single country can't decide to do that even if they don't have euro.
    - giingyui 1y ago
      [dead]
wolvesechoes 1y ago
Controlling currency is one of the most important aspects of being a sovereign country. Poland should adopt euro not sooner than Denmark and Sweden.
- Thlom 1y ago
  Denmark have pegged the krone to the euro. They haven't adopted it, but tied themselves to the Euro. They still maintain control of their currency, but most of that control is used to maintain the value to the euro.
  - Svip 1y ago
    That's because the powers that be want the euro, but the people didn't. They were asked in 1992, 1993 and 2000; and effectively they said no to the euro every time (yes, I know; in 1993, the euro was specifically opted out, but the fact that it was approved when the year before a referendum with the euro was rejected suggests – at least partially – that it was a rejection of the euro (among other things)). Denmark thus came into the EU with 4 opt-outs (one of which has since been rescinded (defence) and one which turned out not to matter (union citizenship)), and they can only be removed with referendum (see for instance the euro one in 2000). Prior to the adoption of the euro, the Danish crown was pegged to the D-mark (since about the mid-1980s), because Germany was the biggest export market for Denmark (still is), and thus having a currency that's stable towards what the Germans are using has been good for Danish exports (less sure how relevant that still is). (Sidebar; had the original motivation of Alternative für Deutschland been successful and abandoned the Euro for a return to the D-mark (neumark?), it would have put Denmark in an awkward position.)
    - consp 1y ago
      This all reads as symbolic nationalist policies with an added burocracy thus costing more than it should. "We need own coin to control [insert nationalist thing here]" but in practice you won't and never did. The last time I was in Denmark my bank nicely charged me for the conversion despite the coin being fixed to the euro. It is just a money costing machine which adds no value.
ViewTrick1002 1y ago
> supra-national non-democratic organisation What part of the EU and ECB is not democratic?
PunchTornado 1y ago
who is non-democratic and why?
- raxxorraxor 1y ago
  The EU institution because of pragmatic and systematic properties. Ultimately to say something is democratic or not is a subjective opinion, but EU proponents have made the mistake to brush such criticism away. Since then the EU is mostly developing in a wrong direction.
  - dmos62 1y ago
    How is democracy subjective? Because most democracy is indirect?
    - raxxorraxor 1y ago
      Democracy is a real democracy if voters feel represented. Perhaps there is a voter here and there that has an objective perspective if representation is enough or not. But I wouldn't bet on it. But you said yourself, that there are different lavels of directness. That is the core argument where everyone has different expectations.
      - bmicraft 1y ago
        The core argument sounds a lot like "it's not true if I don't feel like it's true". Which of course decades of anti-eu parties and ads can have a massive impact on.
        raxxorraxor 1y ago
        You don't have to engage with this kind of criticism but it isn't entirely recent or new nor too complicated ot understand the issues people might have.
  - Sammi 1y ago
    Who is not democratically elected? The EU Parliament is directly elected. The EU Council is comprised of EU country head of states, which are all directly elected. The EU Council and EU Parliament then elect the EU Comission. Sounds democratic to me.
CjHuber 1y ago
But you have a much higher growth rate than Germany, why in the world would you like for Poland to match Germany‘s miserable growth rate
- yxhuvud 1y ago
  Eventually they will catch up to the level of GDP Germany have and then they will start to roughly match their growth rate, over time. It is a lot easier to catch up than to break new ground when it comes to gdp per capita.
ingohelpinger 1y ago
well said. facts.
Discordian93 1y ago
I agree, It think Spain adopted the Euro too soon and we'd have weathered the GFC better if we still had control of our monetary policy at the time. And we didn't grow as much as we could have in the preceding boom phase.
- disgruntledphd2 1y ago
  It's unlikely you'd have had the same boom without joining the euro.
SwtCyber 1y ago
The tradeoff between monetary sovereignty and eurozone stability is real, especially for economies still catching up. That said, there's also a risk in staying out too long. You still get a lot of the downsides (imported inflation, capital flow pressures) but none of the influence. It's a weird halfway state...
anal_reactor 1y ago
Another Polish here: truth is, whether we have a single currency or not doesn't matter as much as people think it does. For most people, it's about symbolism, not about practical economic consequences. I guarantee you that average person has no clue what it really means for the economy to adopt euro. BTW the argument "let's wait for our economy to catch up with Germany" is just deceitful because there will always be differences between economies. Imagine arguing that Nebraska shouldn't be using the dollar until its economy catches up with California... which is going to happen "not in my lifetime". I am strongly pro-euro. Why? Because again, economic consequences are way smaller than most people think, and it's about symbolism. It's about slowly marching towards European Federation instead of NIMBYism that prevents EU from actually living up to its full potential. Imagine a world where the entire European continent is a single political entity - we'd be unquestionable superpower. But no, because "muh independence", and the end result is that we can't do shit on the international stage because we're too busy arguing with each other.
- deleted 1y ago
  [deleted]
- dingaling 1y ago
  > Imagine a world where the entire European continent is a single political entity - we'd be unquestionable superpower Why would that be a good thing?
  - N19PEDL2 1y ago
    > Why would that be a good thing? Ask Ukraine.
  - anal_reactor 1y ago
    That's a bigger philosophical question, but I assume that in the context of this discussion "being a rich and powerful society is good for you" can be taken as an axiom.
- wolvesechoes 1y ago
  But EU becoming federation has far bigger challenges than Poland not adopting euro. Adopting euro has political consequences, first and foremost, not "symbolical". It is quite sad that people and leaders in our country mostly conflate politics with symbols and gestures, because that is causing us to be what we are - losers.
mmarq 1y ago
> The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation This is the point. Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades. Italy, France, etc… didn’t, and inflation was 2-3 point above target and above the German levels. So they joined the Euro, which has a governance very similar to the Deutsche Mark. To this day, inflation in European countries outside the Eurozone is higher.
- throw0101a 1y ago
  > Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades. And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options. Look at all the rigmarole that had to be done so that Germany could start considering military spending to deal with the new global situation. (Heck, if Republicans would actually be interested in fiscal discipline, perhaps they should move to Germany.)
  - mmarq 1y ago
    > And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options. German fiscal discipline is a tool of strategic independence. It started in ‘49 when they knew they would eventually had to reabsorb East Germany. Today it allows them to re-arm without having to ask permission. Over the past 20 years, Germany grew more than Italy, France and the UK.
lifestyleguru 1y ago
You are overcomplicating this. Poland is nepotist kleptocracy, EU and NATO membership away from Belarus. They should adopt euro since yesterday, it's strategic goal in line with membership in EU and NATO. Switzerland can have their own currency, where inflation over 2% is a scandal. Sweden can have their own currency, they produce their own cruisers, submarines, fighter jets, and artillery. Poland kicked out their last baby boom into emigration and now have the same demographic and immigration crisis as geriatric Italy and Germany. They have nuclear power plant company operating with its board receiving executive salaries for fifteen years now and... no nuclear power plants. Accumulated inflation since pre Covid era is 43% and doesn't look to be stopping. Own currency enables enormous fraud and creates class of oligarchs.
- OldfieldFund 1y ago
  Well, Switzerland is not even in the EU, so it's comparing apples and oranges.
  - lifestyleguru 1y ago
    Switzerland is not in the EU but is in e.g. Schengen Area (which seems to be disintegrating right now). They are in a luxurious position to cherrypick whatever they want.
- alkyon 1y ago
  Inflation rose everywhere in Europe due to the economic shock caused by the pandemic and the war in Ukraine. In 2022 inflation rate in Poland was 14% compared to 8% in Spain for example. 2024 figure (for Poland) was down to 4%.
- alkyon 1y ago
  Citation needed on how corruption levels in a EU country depend on adopting the common currency
remon 1y ago
Being able to buy groceries with euros is not a strong, or even related, argument to the point you're making. Even ignoring the real economic cost of having two currencies, there is no serious economist that would argue Poland joining the EUR zone is negative for Poland (as opposed to for stronger EU economies). Every single historic metric points in the other direction. Poland's economy is maturing and strengthening and median household income is slowly reaching parity with neighbouring countries so this particular argument may only hold for maybe another decade but until then it's a bit misguided. Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades. Poland is one of the largest net receivers of EU money since 2004 so arguing it or its single currency was somehow a net negative to Poland is, and by extension an odd argument to make for someone benefiting from the above as a Polish citizen.
- keiferski 1y ago
  Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades. That's one part of it. The other part is that the country had just as much human capital and economic potential as Western European states, but was held back artificially by the Partitions, WW2, the Soviet Union, and the lack of Marshall Plan investment that Western Europe received. Sorry, but the narrative of "Poland is only doing well because the EU is helping" (of which German companies are benefitting from tremendously) is a historically narrow way to analyze the situation.
  - remon 1y ago
    Well, it's a fact, not a narrative. I think the actual debate is whether or not boosting economies of countries in the EU that for one reason or another were or are behind on the curve is a net win. I think it is. Just as it is perfectly justified for other countries to feel a bit hard done by if that same country after an estimates 280 billion euro injection is still rejecting the shared currency of that body.
    - keiferski 1y ago
wuschel 1y ago
Thank you for your interesting comment. > In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion. Could you perhaps expand on this effect, ideally in a mechanistic manner, or point me towards a source that explains the influencing factors and outcomes? I am trying to understand the different processes at hand.
- Roark66 1y ago
  I've learned this long time ago. Probably early 2000s when there was the debate about joining the EUR. I thought the basic explanation about money supply was sufficient, but I can try expanding on this. A typical medium sized country having its own language that has had its own currency for a long time is much more internally economically integrated than externally. We can simplify this by saying huge majority of businesses take part in economic activity within the country, not outside. This gives us some basis to consider it in separation to it's neighbours even if they are in a single market (smaller countries have less separation, bigger countries more, many factors influence the depth of separation but it exists strongly in countries like Poland). So this is why it makes sense to talk in terms of money supply in terms of this "island" of economic activity regardless if it has its own currency or shares another. The we have certain amount of GDP growth each year. More goods and services are produced each year. But simplifying, let's say you and your neighbor are on an island and you have 52 tokens with witch you trade. You catch fish and he works in a field of wheat. You pay him 52 tokens over the course of the year for his wheat and likewise he pays you the same for the fish (one per week for a price of one token). Suddenly you find a net on the beach and you don't need to catch the fish with a DIY rod. You can catch 5 fish per week rather than 2 of which you sold 1. Now you have 4 fish per week to sell, but the guy only has 1 token per week. So if you want to sell all your fish you have to drop the price to 0.25. You do double the work (the nets are heavy) you get 4x the fish and yet you get the same tokens and wheat. Not fair. So you don't catch more fish. This is why we need money supply to grow (or be procured by exports, but let's leave this complex topic for now) if the total of goods and services grows too. Ideally at the same rate or slightly more so goods do not depreciate in price. I already mentioned one reason why deflation is bad, it demotivates producers from growth. Second reason is many costs are static, so it may send them into bankruptcy if others sell more than them at diminished prices. The third reason can also illustrate why we need some inflation. The inflation is necessary for people to have an incentive to invest their money rather than stuff them into a mattress. If we have deflation it literally makes sense not to spend your money today, because you will get more goods for it tomorrow. Until everyone does this and prices go so low half of business go bankrupt. So this is why you need money supply to slightly exceed the GDP growth. This subject can be as simple or as complex as you want. But there are basic truths that work on all levels of complexity. This is one of them.
rhubinak 1y ago
Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). Do you have to exchange money when traveling abroad? Now imagine buying/selling stuff abroad as a company and multiply that by a lot. You get the picture. For countries that deal mostly with Eurozone based countries (which are most countries in Europe) you get massive savings that'll make the country more attractive to outside investors. Any potential price increase would be dwarfed by the rise in wages. All of this happened in Slovakia (and would be great to happen in Czechia if not for previous eurosceptic governments that massaged public opinion heavily). Sadly, the successive corrupt governments of Robert Fico ate many of the benefits to ordinary folks and Russian propaganda machine left some people questioning the value of euro and EU membership. But even 15+ years after adopting € the approval rating in Slovakia is very strong. All of this would be much worse without the euro. Personally, I'm all for everything that gets Europe closer to federalization and strengthens it.
- Roark66 1y ago
  >Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. This is my argument exactly. A seat gives a certain small amount if influence, the resulting policy will be an approximation of what is best for everyone. This may be pretty far from what is best for a developing country with fast growth if the majority is well developed countries with low growth. Imagine you and your neighbour decide to pool your money and invest together. He is 65 years old and has 50k EUR, you are 21 years old and you have 1k. He prefers to put his money in a bank savings acct that will allow him to withdraw anytime (he's retiring soon) and he doesn't want any risk. You on the other hand don't mind risk at all, but you need a high rate of return (stocks would be good for you, maybe of the more "adventurous" kind). If you pool your money he will have much more to say so you end up maybe with a 6 months term savings deposit to get a little more gain. You're both unhappy because that is not enough profit to you and it still locks up his money preventing him from choosing an early retirement. Compromises sometimes work for both sides, sometimes they don't work for anyone... >You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). You can get Euro denominated mortgages in Poland as well. As well as Swiss Frank, Dollar etc. A country does not have to get rid of its currency for people to enjoy lower interest rates in other currencies. You can make an argument if you earn in PLN and take a mortgage in EUR it exposes you to the currency risk and it does. It is your personal choice. But there are plenty of jobs (usually higher paying) that pay a set amount of EUR or USD and it's often these kinds of people for whom these mortgages make sense. We even have a long running scandal involving almost a million of people that got Swiss Frank mortgages over a decade ago that had interest rates below 1% and the banks structured these deals in such a way they made a killing on exchange commission. Basically people didn't realise they had to pay in PLN and the mortgage provider would convert to CHF applying their exorbitant conversion rates. There was no way to just pay in CHF. But this story is over a decade old and people have learned the lesson.
pllbnk 1y ago
It's unfair to compare Poland with Baltics due to the size and diversity of the economies but adopting the Euro there has coincided with massive economic growth. I also think it's rather likely that comparable economic growth could have been achieved without it but it's certainly easier to travel and trade.

mytailorisrich 1y ago

Exactly right. The euro has benefited countries like Germany a lot but not necessarily all countries.

deleted 1y ago
[deleted]

petre 1y ago

You can't possibly compare Poland to Bulgaria with 1/8 Poland's GDP and 17% its population. For Bulgaria the Euro is completely fine, as the Lev has been pegged to the Deutche Mark and later the Euro for ages. It's exports are basically raw materials and grain. Most of the other stuff they produce is sold domestically. I think I've only seen Bulgarian sunflower oil, mineral water, ketchup and pasta in stores outside the country. For a state with so feeble exports and a pegged currency it really doesn't matter, only adds up currency conversion fees. They might want to attract more tourism and investments.

ingohelpinger 1y ago
not true, almost the entire domestic production like veggies is exported and turkish, greece, dutch low quality stocks imported.
- petre 1y ago
  Yes, but it's still agri products sold for pennies. Compare that to motor vehicles, car parts, furniture and sanitary hardware that Poland exports. Also, I never ate Shopska salad made with Dutch tomatoes in Bulgaria, even in restaurants outside of Sofia. I can tell the difference, they almost always served the good ripe stuff that has taste, not the watery green variety or the huge Greek tomatoes with air gaps inside.
  - ingohelpinger 1y ago
    for penni's, because they are dumping the prices by importing crap, so the local producer cant sell his product on the domestic market.
    - tmcdos 1y ago
      Quite true!
szszrk 1y ago
I find his view a bit polarized, but can't really see him comparing those countries at all. But if we talk about Polish-Bulgarian exchanges: Those two countries actually have more or less the same numbers of Euro spent on import and export between each other. Bulgaria doubled export to Poland in just 2 years. Food products are important, but Bulgaria also exports to Poland many metals, mechanical and electrical devices, pharmaceuticals... The biggest Polish import from Bulgaria in 2023 were almost a billion Euro on guns and ammunition. "Seeds and oily fruits" (whatever is the correct translation) were 20x less than that. - https://www.gov.pl/web/bulgaria/informator-ekonomiczny4 https://www.gov.pl/web/bulgaria/informator-ekonomiczny4

guappa 1y ago

Doesn't really matter because being in EU you can't print money, being euros or whatever local currency you have.

giingyui 1y ago
https://www.reuters.com/article/world/ecb-to-print-1-trillion-euro-this-year-to-stem-coronavirus-rout-idUSKBN21606O/ https://www.reuters.com/article/world/ecb-to-print-1-trillio...
- guappa 1y ago
  And? A single country can't decide to do that even if they don't have euro.
  - giingyui 1y ago
    [dead]

wolvesechoes 1y ago

Controlling currency is one of the most important aspects of being a sovereign country. Poland should adopt euro not sooner than Denmark and Sweden.

Thlom 1y ago
Denmark have pegged the krone to the euro. They haven't adopted it, but tied themselves to the Euro. They still maintain control of their currency, but most of that control is used to maintain the value to the euro.
- Svip 1y ago
  That's because the powers that be want the euro, but the people didn't. They were asked in 1992, 1993 and 2000; and effectively they said no to the euro every time (yes, I know; in 1993, the euro was specifically opted out, but the fact that it was approved when the year before a referendum with the euro was rejected suggests – at least partially – that it was a rejection of the euro (among other things)). Denmark thus came into the EU with 4 opt-outs (one of which has since been rescinded (defence) and one which turned out not to matter (union citizenship)), and they can only be removed with referendum (see for instance the euro one in 2000). Prior to the adoption of the euro, the Danish crown was pegged to the D-mark (since about the mid-1980s), because Germany was the biggest export market for Denmark (still is), and thus having a currency that's stable towards what the Germans are using has been good for Danish exports (less sure how relevant that still is). (Sidebar; had the original motivation of Alternative für Deutschland been successful and abandoned the Euro for a return to the D-mark (neumark?), it would have put Denmark in an awkward position.)
  - consp 1y ago
    This all reads as symbolic nationalist policies with an added burocracy thus costing more than it should. "We need own coin to control [insert nationalist thing here]" but in practice you won't and never did. The last time I was in Denmark my bank nicely charged me for the conversion despite the coin being fixed to the euro. It is just a money costing machine which adds no value.

ViewTrick1002 1y ago

> supra-national non-democratic organisation What part of the EU and ECB is not democratic?

PunchTornado 1y ago

who is non-democratic and why?

raxxorraxor 1y ago
The EU institution because of pragmatic and systematic properties. Ultimately to say something is democratic or not is a subjective opinion, but EU proponents have made the mistake to brush such criticism away. Since then the EU is mostly developing in a wrong direction.
- dmos62 1y ago
  How is democracy subjective? Because most democracy is indirect?
  - raxxorraxor 1y ago
    Democracy is a real democracy if voters feel represented. Perhaps there is a voter here and there that has an objective perspective if representation is enough or not. But I wouldn't bet on it. But you said yourself, that there are different lavels of directness. That is the core argument where everyone has different expectations.
    - bmicraft 1y ago
      The core argument sounds a lot like "it's not true if I don't feel like it's true". Which of course decades of anti-eu parties and ads can have a massive impact on.
      - raxxorraxor 1y ago
        You don't have to engage with this kind of criticism but it isn't entirely recent or new nor too complicated ot understand the issues people might have.
- Sammi 1y ago
  Who is not democratically elected? The EU Parliament is directly elected. The EU Council is comprised of EU country head of states, which are all directly elected. The EU Council and EU Parliament then elect the EU Comission. Sounds democratic to me.

CjHuber 1y ago

But you have a much higher growth rate than Germany, why in the world would you like for Poland to match Germany‘s miserable growth rate

yxhuvud 1y ago
Eventually they will catch up to the level of GDP Germany have and then they will start to roughly match their growth rate, over time. It is a lot easier to catch up than to break new ground when it comes to gdp per capita.

ingohelpinger 1y ago

well said. facts.

Discordian93 1y ago

I agree, It think Spain adopted the Euro too soon and we'd have weathered the GFC better if we still had control of our monetary policy at the time. And we didn't grow as much as we could have in the preceding boom phase.

disgruntledphd2 1y ago
It's unlikely you'd have had the same boom without joining the euro.

SwtCyber 1y ago

The tradeoff between monetary sovereignty and eurozone stability is real, especially for economies still catching up. That said, there's also a risk in staying out too long. You still get a lot of the downsides (imported inflation, capital flow pressures) but none of the influence. It's a weird halfway state...

anal_reactor 1y ago

Another Polish here: truth is, whether we have a single currency or not doesn't matter as much as people think it does. For most people, it's about symbolism, not about practical economic consequences. I guarantee you that average person has no clue what it really means for the economy to adopt euro. BTW the argument "let's wait for our economy to catch up with Germany" is just deceitful because there will always be differences between economies. Imagine arguing that Nebraska shouldn't be using the dollar until its economy catches up with California... which is going to happen "not in my lifetime". I am strongly pro-euro. Why? Because again, economic consequences are way smaller than most people think, and it's about symbolism. It's about slowly marching towards European Federation instead of NIMBYism that prevents EU from actually living up to its full potential. Imagine a world where the entire European continent is a single political entity - we'd be unquestionable superpower. But no, because "muh independence", and the end result is that we can't do shit on the international stage because we're too busy arguing with each other.

deleted 1y ago
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dingaling 1y ago
> Imagine a world where the entire European continent is a single political entity - we'd be unquestionable superpower Why would that be a good thing?
- N19PEDL2 1y ago
  > Why would that be a good thing? Ask Ukraine.
- anal_reactor 1y ago
  That's a bigger philosophical question, but I assume that in the context of this discussion "being a rich and powerful society is good for you" can be taken as an axiom.
wolvesechoes 1y ago
But EU becoming federation has far bigger challenges than Poland not adopting euro. Adopting euro has political consequences, first and foremost, not "symbolical". It is quite sad that people and leaders in our country mostly conflate politics with symbols and gestures, because that is causing us to be what we are - losers.

mmarq 1y ago

> The biggest issue is giving up one of the biggest instrument of control over the economy to a supra-national non-democratic organisation This is the point. Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades. Italy, France, etc… didn’t, and inflation was 2-3 point above target and above the German levels. So they joined the Euro, which has a governance very similar to the Deutsche Mark. To this day, inflation in European countries outside the Eurozone is higher.

throw0101a 1y ago
> Germany managed to set up a really independent central bank (which is a non- democratic, bureaucratic, etc… thingy) and inflation was at the target for decades. And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options. Look at all the rigmarole that had to be done so that Germany could start considering military spending to deal with the new global situation. (Heck, if Republicans would actually be interested in fiscal discipline, perhaps they should move to Germany.)
- mmarq 1y ago
  > And Germany being overzealous in fiscal and monetary policy has stagnated growth and limited policy options. German fiscal discipline is a tool of strategic independence. It started in ‘49 when they knew they would eventually had to reabsorb East Germany. Today it allows them to re-arm without having to ask permission. Over the past 20 years, Germany grew more than Italy, France and the UK.

lifestyleguru 1y ago

You are overcomplicating this. Poland is nepotist kleptocracy, EU and NATO membership away from Belarus. They should adopt euro since yesterday, it's strategic goal in line with membership in EU and NATO. Switzerland can have their own currency, where inflation over 2% is a scandal. Sweden can have their own currency, they produce their own cruisers, submarines, fighter jets, and artillery. Poland kicked out their last baby boom into emigration and now have the same demographic and immigration crisis as geriatric Italy and Germany. They have nuclear power plant company operating with its board receiving executive salaries for fifteen years now and... no nuclear power plants. Accumulated inflation since pre Covid era is 43% and doesn't look to be stopping. Own currency enables enormous fraud and creates class of oligarchs.

OldfieldFund 1y ago
Well, Switzerland is not even in the EU, so it's comparing apples and oranges.
- lifestyleguru 1y ago
  Switzerland is not in the EU but is in e.g. Schengen Area (which seems to be disintegrating right now). They are in a luxurious position to cherrypick whatever they want.
alkyon 1y ago
Inflation rose everywhere in Europe due to the economic shock caused by the pandemic and the war in Ukraine. In 2022 inflation rate in Poland was 14% compared to 8% in Spain for example. 2024 figure (for Poland) was down to 4%.
alkyon 1y ago
Citation needed on how corruption levels in a EU country depend on adopting the common currency

remon 1y ago

Being able to buy groceries with euros is not a strong, or even related, argument to the point you're making. Even ignoring the real economic cost of having two currencies, there is no serious economist that would argue Poland joining the EUR zone is negative for Poland (as opposed to for stronger EU economies). Every single historic metric points in the other direction. Poland's economy is maturing and strengthening and median household income is slowly reaching parity with neighbouring countries so this particular argument may only hold for maybe another decade but until then it's a bit misguided. Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades. Poland is one of the largest net receivers of EU money since 2004 so arguing it or its single currency was somehow a net negative to Poland is, and by extension an odd argument to make for someone benefiting from the above as a Polish citizen.

keiferski 1y ago
Also, not for nothing but the Polish economy is mostly doing as well as it does because of the metric ton of EU subsidies injected into it the past decades. That's one part of it. The other part is that the country had just as much human capital and economic potential as Western European states, but was held back artificially by the Partitions, WW2, the Soviet Union, and the lack of Marshall Plan investment that Western Europe received. Sorry, but the narrative of "Poland is only doing well because the EU is helping" (of which German companies are benefitting from tremendously) is a historically narrow way to analyze the situation.
- remon 1y ago
  Well, it's a fact, not a narrative. I think the actual debate is whether or not boosting economies of countries in the EU that for one reason or another were or are behind on the curve is a net win. I think it is. Just as it is perfectly justified for other countries to feel a bit hard done by if that same country after an estimates 280 billion euro injection is still rejecting the shared currency of that body.
  - keiferski 1y ago

wuschel 1y ago

Thank you for your interesting comment. > In time things get more expensive much faster in countries that grow faster while incomes stay the same. This is a huge negative and this is on top of price increases happening on "day 1" due to rounding up during conversion. Could you perhaps expand on this effect, ideally in a mechanistic manner, or point me towards a source that explains the influencing factors and outcomes? I am trying to understand the different processes at hand.

Roark66 1y ago
I've learned this long time ago. Probably early 2000s when there was the debate about joining the EUR. I thought the basic explanation about money supply was sufficient, but I can try expanding on this. A typical medium sized country having its own language that has had its own currency for a long time is much more internally economically integrated than externally. We can simplify this by saying huge majority of businesses take part in economic activity within the country, not outside. This gives us some basis to consider it in separation to it's neighbours even if they are in a single market (smaller countries have less separation, bigger countries more, many factors influence the depth of separation but it exists strongly in countries like Poland). So this is why it makes sense to talk in terms of money supply in terms of this "island" of economic activity regardless if it has its own currency or shares another. The we have certain amount of GDP growth each year. More goods and services are produced each year. But simplifying, let's say you and your neighbor are on an island and you have 52 tokens with witch you trade. You catch fish and he works in a field of wheat. You pay him 52 tokens over the course of the year for his wheat and likewise he pays you the same for the fish (one per week for a price of one token). Suddenly you find a net on the beach and you don't need to catch the fish with a DIY rod. You can catch 5 fish per week rather than 2 of which you sold 1. Now you have 4 fish per week to sell, but the guy only has 1 token per week. So if you want to sell all your fish you have to drop the price to 0.25. You do double the work (the nets are heavy) you get 4x the fish and yet you get the same tokens and wheat. Not fair. So you don't catch more fish. This is why we need money supply to grow (or be procured by exports, but let's leave this complex topic for now) if the total of goods and services grows too. Ideally at the same rate or slightly more so goods do not depreciate in price. I already mentioned one reason why deflation is bad, it demotivates producers from growth. Second reason is many costs are static, so it may send them into bankruptcy if others sell more than them at diminished prices. The third reason can also illustrate why we need some inflation. The inflation is necessary for people to have an incentive to invest their money rather than stuff them into a mattress. If we have deflation it literally makes sense not to spend your money today, because you will get more goods for it tomorrow. Until everyone does this and prices go so low half of business go bankrupt. So this is why you need money supply to slightly exceed the GDP growth. This subject can be as simple or as complex as you want. But there are basic truths that work on all levels of complexity. This is one of them.

rhubinak 1y ago

Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). Do you have to exchange money when traveling abroad? Now imagine buying/selling stuff abroad as a company and multiply that by a lot. You get the picture. For countries that deal mostly with Eurozone based countries (which are most countries in Europe) you get massive savings that'll make the country more attractive to outside investors. Any potential price increase would be dwarfed by the rise in wages. All of this happened in Slovakia (and would be great to happen in Czechia if not for previous eurosceptic governments that massaged public opinion heavily). Sadly, the successive corrupt governments of Robert Fico ate many of the benefits to ordinary folks and Russian propaganda machine left some people questioning the value of euro and EU membership. But even 15+ years after adopting € the approval rating in Slovakia is very strong. All of this would be much worse without the euro. Personally, I'm all for everything that gets Europe closer to federalization and strengthens it.

Roark66 1y ago
>Slovak here living in Czechia. Adopting euro would give you a seat at the ECB granting influence over monetary policy in the whole Eurozone. This is my argument exactly. A seat gives a certain small amount if influence, the resulting policy will be an approximation of what is best for everyone. This may be pretty far from what is best for a developing country with fast growth if the majority is well developed countries with low growth. Imagine you and your neighbour decide to pool your money and invest together. He is 65 years old and has 50k EUR, you are 21 years old and you have 1k. He prefers to put his money in a bank savings acct that will allow him to withdraw anytime (he's retiring soon) and he doesn't want any risk. You on the other hand don't mind risk at all, but you need a high rate of return (stocks would be good for you, maybe of the more "adventurous" kind). If you pool your money he will have much more to say so you end up maybe with a 6 months term savings deposit to get a little more gain. You're both unhappy because that is not enough profit to you and it still locks up his money preventing him from choosing an early retirement. Compromises sometimes work for both sides, sometimes they don't work for anyone... >You'd also get cheaper money (think mortgage rates going from ~7% (current rates in Poland) to less than 4% (current rates in Slovakia)). You can get Euro denominated mortgages in Poland as well. As well as Swiss Frank, Dollar etc. A country does not have to get rid of its currency for people to enjoy lower interest rates in other currencies. You can make an argument if you earn in PLN and take a mortgage in EUR it exposes you to the currency risk and it does. It is your personal choice. But there are plenty of jobs (usually higher paying) that pay a set amount of EUR or USD and it's often these kinds of people for whom these mortgages make sense. We even have a long running scandal involving almost a million of people that got Swiss Frank mortgages over a decade ago that had interest rates below 1% and the banks structured these deals in such a way they made a killing on exchange commission. Basically people didn't realise they had to pay in PLN and the mortgage provider would convert to CHF applying their exorbitant conversion rates. There was no way to just pay in CHF. But this story is over a decade old and people have learned the lesson.

pllbnk 1y ago

It's unfair to compare Poland with Baltics due to the size and diversity of the economies but adopting the Euro there has coincided with massive economic growth. I also think it's rather likely that comparable economic growth could have been achieved without it but it's certainly easier to travel and trade.