Commission Report (2002): Poland

• Progress since the last Regular Report
• Overall assessment
• Conclusion

Chapter 11: Economic and Monetary Union

Progress since the last Regular Report

A detailed assessment of the various aspects of Poland's economic policy has been given above, in the Chapter discussing the economic criteria (B-2). Therefore, the present section is limited to a discussion of those aspects of the Economic and Monetary Union Acquis -- as defined by Title VII of the EC Treaty and the other relevant texts -- which candidate countries should implement before accession, i.e. the prohibition of direct public sector financing by the central bank, the prohibition of privileged access of the public sector to financial institutions, and the independence of the national central bank. As to the process of liberalisation of capital movements, upon the completion of which compliance with the EMU acquis is conditional, this aspect has been covered above, in the section on Chapter 4 ­ Free movement of capital.

Since the last Regular Report, no further progress towards alignment with the acquis has occurred.

Overall assessment

Poland will participate in EMU upon accession with the status of a country with a derogation under Article 122 of the EC Treaty, and it will need to implement the necessary changes to its institutional and legal framework by the date of accession.

Direct public sector financing by the central bank is prohibited in line with Article 101 of the EC Treaty and no regulations have been identified which would create privileged access of the public sector to financial institutions.

As regards central bank independence, the 1997 Act on the National Bank of Poland (NBP) is already close to full compliance, but necessitates amendments regarding the conditions for the participation of the government representative in the Monetary Policy Council and provisions relating to financial and personal independence. The process of adopting these amendments has been complicated by the ongoing debate on the appropriateness of monetary policy in Poland. This debate has already led to a number of legislative initiatives by individual parties aimed at modifying the status of the NBP in ways that would not be wholly compatible with the acquis. In this context, it is important that Poland abides by its stated objective and its timetable to achieve full alignment with the acquis by the end of 2002.

Conclusion

In its 1997 Opinion, the Commission, referring to the pending reform of the NBP, concluded that it was important to make central bank legislation compatible with EC rules.

Since the Opinion, Poland has achieved a high level of alignment with the EMU-related acquis and developed a strong administrative capacity.

Negotiations on this chapter have been provisionally closed. Poland has not requested any transitional arrangements in this area. Poland is currently generally meeting the commitments it has made in the accession negotiations in this domain.

In order to complete preparations for membership, Poland's efforts should focus on ensuring full independence of the NBP as scheduled.

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