Sorry, you typed "HAS TO" abandon the zloty??? You mean like the UK abandoned the GBP Pound Sterling, right? I've never seen so many economic blunders in one post......
Then there's your point comparing GBP, PLN, EUR, and RMB all in the same sentence. What are you trying to say? No country is ever FORCED to devalue it's currency. It's something politicians and central bankers decide to do because they think they can get away with it. History shows that for a little while, they usually DO get away with it until the truth gets to the people and/or the market collapses or makes a HUGE correction. To really compare fiat currencies is mostly folly. There's no standard at which to reference. One might say the "USD" is the standard, but that one fluctuates as well.....
If anyone is interested in this, I'd encourage you to read up on FIAT currency. Rome was destroyed over fiat when they started putting less and less silver into their currency the Denarius. http://en.wikipedia.org/wiki/Denarius
The truth is, that unless a currency is backed by a commodity (traditionally gold or silver, etc.), it has no other value that what the users perceive. To illustrate my point, let's say we find a chest at the bottom of the ocean.... Half of the chest was old Polish zloty and the other gold. Which one has value? Exactly, the gold. Feel free to fill in the blank with virtually any paper currency in history. You now understand. The Austrian Free-Market economists like Mises, Rothbard, and Hayek teach and warn about this. Read those guys and you will REALLY get an understanding on what money is. For starters, I'd recommend reading things like this from the Mises Institute: http://mises.org/daily/5577/The-Lure-of-a-Stable-Price-Level
Ok, so returning to the main subject about Euro adoption in Poland..... Poland "should" adopt it according to the Lisbon and Maastricht treaties, but it's not set in stone, so not an "enforceable" law per se. So, sorry, try again..... http://en.wikipedia.org/wiki/Maastricht_treaty (see point 2 near the top). and this: http://en.wikipedia.org/wiki/Treaty_of_Lisbon
So if we want to get technical, those treaties set up something called the ERM2 mechanism which is essentially a "waiting room" for a country that wants to get the Euro. How does it work? Basically, the exchange rates and deficit, debt-to-GDP, inflation, and exchange rate must be fixed or semi-fixed within a 2-year period after ECB approval. Then, and ONLY then can Poland adopt the Euro. *IF* during that 2-year period any of those numbers go outside the strict bounds set by the ECB, the whole deal is canceled. Since the ERM standards are so strict for money-printing central banks nowadays, most Polish economists largely laugh about the government's Euro adoption dates being realistic (although many support the idea of a common currency itself). Oddly enough, most economists KNOW THIS and refuse to speak out about it. They've been taught Keynesian economics which teaches absurd things like running up deficits and increase taxes during bad times. Mostly, the opposite is true.
Specifically in this case, Poland's problem is that the central bank, NBP is printing too much money or monetizing debt as well as doing lots of currency swaps to finance government spending and entitlements (public healthcare, beczikowe, retirement, etc...). How do we know, you ask?? Watch the supply of cash. Money supply is measured by a statistic called M3. Download the spreadsheet yourself from the NBP site and see the increases over the years: http://www.nbp.pl/homen.aspx?f=/en/statystyka/m3/m3.html and also here you can see past example reports: http://www.xe.com/news/2011-05-13%2010:10:00.0/1897629.htm The last M3 statistic I read shows a 9% increase year to year. WOW! If the cost of anything in your home (or the value went down) by 9% you would be talking about it. Yet, not a word from Polish economists that are told to kowtow to the financial institutions. literally....
So, sadly, Poland's situation is not all that rosy as MANY would expect or assume. They're by-and-large copying from the USA's playbook in many (but not all) ways.
|
