Katarzyna Zajdel-Kurowska and the Euro

Poland's Deputy Finance Minister Katarzyna Zajdel-Kurowska is widely quoted this morning as saying:

``Poland is definitely on the way to the euro.''

She made this statement after revealing that Poland's 2007 budget deficit will be narrower than the government's original forecast. I have no idea when or whether Poland will enter the euro, but I would say that, as in the case of the Baltics, the potential labour shortage issue, and the problem of wage and cost push inflation that this will generate is a much more important medium term obstacle to Poland's euro membership than the budget deficit issue is.