Fitch: Poland and the Czech Republic will gain at least euro adoption – Banker

Fitch Ratings took
 under the microscope consequences of the eventual adoption of the euro by European countries
 Central and Eastern Europe. From the analysis of the rating agency that Poland and the Czech Republic the least benefit
 for accession to the euro zone. All this, however, purely theoretical considerations, since the adoption of the euro by other countries does not seem possible today.

 
 
 

– Given
 the lessons of the crisis, the euro zone and in accordance with long-term approach,
 it is clear that the strongest would benefit countries with weak external positions
 financial, as would benefit from the status of the euro as a reserve currency, as well as countries
 a high level of debt in the euro because it would benefit from the neutralization
 foreign exchange risk for the economy – Fitch says in a recent report.

 

According to analysts
 Fitch most in the adoption of the euro would benefit Croatia and Bulgaria. Currencies
 both countries – kuna and lion – and so are pegged to the euro, so there
 it would be no question of the loss of the privilege of conducting its own monetary policy.
 Additionally, in both economies is noticed a strong “euroisation” – Croatia
 debt private and public sector in the euro is 46% and
 57%. In both countries remains a high unemployment rate (16.9% Croatia;
 Bulgaria 11.5%), and in addition in Croatia there has been a high level of relations
 debt to GDP (86% in 2015.).

 

A little less on
 accession to the euro zone would benefit Romania and Hungary. Fitch indicated above
 all the loss of opportunities for their own monetary policy. Euro
 Hungary, however, could help reduce the cost of debt financing, the government
 some 23% is debt in euros.

 

According to the
 Fitch, on the adoption of the single currency would gain at least the Czech Republic and Poland.

 

– Both countries
 He would have to give up a credible and independent monetary policy, which helped
 to support the adjustment of macroeconomic economies. In Poland would strengthen the euro
 the financial position of the international – the main negative factor for the rating – but still a lot of loans to households
 granted in francs – we read in the explanatory memorandum.

 

Fitch notes that
 in any of the described countries has not been given a date of entry into the mechanism
 ERM is to adopt the euro, and the political climate does not indicate that this will
 change. Particularly strong Euroscepticism agency noted in Poland and
 Hungary.

 

– Recent developments
 economic situation and the financial crisis may be the key factors
 explaining the sentiment. Fitch does not expect the debate on the adoption of the euro
 was to begin in the near future – says the agency.

 

According to calculations agency, Bulgaria, Czech Republic, Poland and Romania meet all
 convergence criteria, in addition to participation in ERM II. Hungary
 They meet the three criteria, and Croatia two.

 

According to the agency, the adoption of
 euro would be neutral or positive for the ratings of countries in our region.
 Currently, Fitch assigns the following long-term ratings in foreign currency:
 Czech Republic (A + / Stable), Poland (A- / Stable), Romania
 (BBB- / Stable), Bulgaria (BBB- / Stable), Hungary (BB + / Positive), Croatia
 (BB / Negative).

 

Michael Żuławiński