The Eurozone and Poland: Currency, Trade and Capital Markets

Poland and the Eurozone: currency, trade and capital markets Prof. Cezary W贸jcik

Institute of Economics of PAN and the Global Interdependence Centre in cooperation with the NBP Warsaw, 24 May 2012

What I am not going to talk about?

Exit Rules – Modelling framework • Acceptability condition for a ‘credible threat’.

What I am going to talk about?

1.Economist’s none-economic view on the future of the euro area 2.What should Poland do about it?

What can we do?

1.

There is nothing that can solve the problem in the short-run

2.

The solution is largely outside economics

3.

The future of euro area depends on one thing - our willingness to stay together

Togetherness?

Adaptive – Not Technical

Using and Managing the Crisis Limit of tolerance

Productive Zone of Disequilibrium Threshold of tolerance

Adaptive Work Work avoidance I. Acute Phase

II. Adaptive Phase

Source: Heifetz and Laurie (1998).

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What should Poland do?

• Support • Prepare for the worst case scenario • Wait • Ask: is this a one-off event or it can repeat?

Thank you