Poland will never join a ‘burning’ eurozone, says central bank governor

Marek Belka says country remains reluctant to join the euro, as he warns that world is running out of ammunition to fight the next financial crisis

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.

In a stark warning, Mr Belka also said the world was running out of ammunition to fight the next financial crisis.

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.

“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,” he said.

He said closer union was needed within “a generation” to prevent the bloc from lurching from crisis to crisis.

The full interview

What is the biggest risk to the global economy?

The next crisis, because we have used so much of our war chest to fight the former crisis that it would be difficult to fight another one. We don’t have the option of decreasing interest rates. Much fewer countries have fiscal space to intervene so we are less prepared. If we get into a next crisis, we have less weaponry to fight it.

Full article: Poland will never join a ‘burning’ eurozone, says central bank governor (The Telegraph)

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