Stabilization of Zloty Within the Exchange Rate Mechanism II (ERM II) as an Alternative for the Floating Exchange-Rate Regime and the Unpopular Idea for Introducing Euro in the Polish Society

Abstract

Poland belongs to a shrinking minority – despite the economic crisis – of the non-Eurozone countries in the EU. The unwillingness of politicians and citizens to introduce the euro, indicates the need for dissemination of professional knowledge and apolitical discussion about the euro. This should give a convincing explanation about the consequences of the instability of the exchange rate for Polish economy, the challenges of the pegged exchange rate, the reasons for the strong differences in the perception of the desired exchange rate level. It also should show that Polish economy is strongly dependent on the exchange rate, and make people aware of other possible solutions for the exchange rate regime and give an extensive analysis of their consequences – from self-stabilization of the exchange rate, through the membership in the ERM II, and finally the introduction of the euro. The aim of this paper is to present one of these alternatives – the membership in the exchange rate mechanism ERM II and to indicate the advantages of this solution. It would increase not only the stability of the economy, but also its credibility thanks to the European Central Bank’s guarantee. It would give also the opportunity to test the competitiveness of Polish economy at the chosen central course to the euro, and finally would constitute a contribution to the public education about the role of the exchange rate in the economy being a part of the single market in the European Union and to the discussions about the other – perhaps better than the present one in Poland – exchange rate regime solutions.