Poland in or outside the eurozone – possible scenarios

This paper discusses the issue of Poland’s future economic performance in the case of either adopting the euro or remaining outside the eurozone. The author claims that irrevocable fixing of the exchange rate deeply affects the economy. On the one hand, it allows for the microeconomic gains that, if fully exploited, may lead to faster growth and modernization. One the other hand, it brings about multiple risks, including challenges related to the adjustment to external shocks in the absence of monetary policy tools, as well as a risk of “the Southern eurozone countries’ trap”, namely excessive debt caused by easy access to inexpensive capital. Nevertheless, the key factor determining final outcome is the efficiency of functioning of the Polish economy, its economic policy, and institutions.