The Potential Threats of Poland’s Adoption of the Single Currency in the Light of the Spain’s Experiences and the Chosen Euro Zone Countries’ Economic Performance

Abstract

The subject of the paper is the empirical analysis that aims to verify the benefits and threats of sacrificing the national currency for the euro, and the case study is the example of Spain. The economy of this country, as regards its potential, the stage of development and structural features, can be compared to the Polish economy. The analysis of longterm economic growth factors in Spain and growing macroeconomic imbalances seems to be useful for Poland in assessing the economy and development possibilities under conditions of a monetary union. The important part of the analysis is the assessment of Polish economic performance in the period 2000-2014 on the background of the euro area average as well as of Germany, Finland, Greece, Spain, Portugal and Slovakia using eleven macroeconomic indicators. The assessment of economic performance has been carried out in separated two periods: 2000–2007 and 2008–2014 in order to investigate the euro area member states’ and Poland’s development potential under conditions of stable business climate and the ability to recover during 2008–2014. The aim of the paper is to assess the risks for Poland after joining the monetary union from the viewpoint of achieved economic convergence, effects of adjustment process and Spain’s experiences. The Authors assume that the level of the credit boom marks the safety line between bene-fits and costs of joining the monetary union, and mainly countries with lower labor productivity and technologically weaker are at risk. Comparing the Polish economic performance with selected euro area countries the Authors look for the answers to three questions: Has Poland already reached the stage of development that ensures achieving the benefits of the monetary union? To what extent ten years of membership in the European Union have contributed to the economy adaptation to the functioning under conditions of the single internal market? Are there any threats to the macroeconomic balance maintenance?