The Eurozone accession dilemma in Poland and other Central European member states: join or not to join?

Author: Elvita Mertins 

Image by Rene Fluger Josef Horazny/Czech News Agency

Poland obliged to adopt the euro when it joined the European Union (EU) in 2004, whereas no
specific deadline was set for its entry into the currency union. Just after the Poland’s accession to the EU there was a strong general support for joining the Eurozone. In fact, the entry to the EU has been an important source of prosperity for Poland. The EU support through European structural and investment funds, free trade and labor mobility, together with security integration, have not only brought positive changes to Poland’s economy but also significantly bettered overall standards of living. However, recent developments within the global financial and the Eurozone crisis in 2008 engendered widespread opposition to the euro among Poland’s political and economic elites but also in the society as a whole. The case of the Greek financial crisis has been recalled as a significant warning, showing the risks and weaknesses of the Eurozone accession. In addition, Brexit, the rise of euroscepticism and various political tensions within the EU, have caused great doubts and hesitations to introduce the euro in the country. In fact, the adoption of the euro became seen as a source of economic instability, and until now Poland has been strongly avoiding any declaration about joining the Eurozone in the foreseeable future, despite fulfilling the Maastricht criteria. The most common position of why Poland should not introduce euro among Poland’s political leaders is the floating exchange rate that helped them in regaining growth during and after the crisis in 2008. Indeed, monetary policy helped the country overcome the financial crisis, as a result Poland is strongly against to enter the fixed exchange rate mechanism. A flexible exchange rate helped Poland avoid a similar build-up of imbalances ahead of the crises, in contrast to the countries in the Eurozone. Poland’s economy has grown during and after the crisis, and there is a general conviction that Poland’s economic growth and competitiveness will slow down inside the Eurozone. Since, the stability of the Eurozone itself was and still is in question, and the country’s flexible exchange rate have proved to be beneficial in its recent economic performance – Poland is determined to stay outside the euro area with no near future obligation to adopt the common currency. In the short-time perspective, the abovementioned arguments against the Eurozone accession, in fact, may have some logic reasoning, but in the long-term perspective it will have the exactly opposite effect. Poland’s decision to stay with its national currency will run the risk of becoming both politically and economically alienated and marginalized within the EU. If the Eurozone’s integration policy fails and the EU splits into the two blocks, namely non-Eurozone member states and the Eurozone countries, there is a great probability that the Eurozone countries will have more political weight and a real impact on the most important economic and political decisions. Therefore, the non-Eurozone countries are at risk of being marginalized and become the periphery of the EU as long they it do not start implementing a viable plan of euro adoption. Poland is not the only the Central European member-state agitating against the accession to the monetary union. Hungary and Czech Republic also have the strong doubts whether to join or not the common currency. All these three post-Soviet countries provide the similar arguments why joining the Eurozone would clearly be not beneficial. One may say, that staying with the national currency is not a catastrophe. For example, Sweden is a member state which enjoys the benefits of its own currency as well as sound economic situation. Nevertheless, the Czech, Poland, and Hungary economies strongly differ from the Swedish economy. Sweden has a well-developed economy, with a low and stable inflation and a healthy banking system. Due to its high political and social standards, the country is considered as one of the greatest place for making business. Countries like Poland, however, have been dealing with a big variety of social and economic problems, political instability and uncertainty are still taking place. Considering all this, if Sweden’s economy can function well staying outside ‘the euro monetary club’, it is highly unlikely (at least in the long-term perspective) Poland and other post-Soviet countries can run their economies with its national currency so effectively and efficiently as Sweden does. In this context, the euro would work as a confidence booster that could help to convince international investors of political and economic stability of the countries. All in all, if Poland and other post-Soviet member states want to ensure their economic and social stability, the adaptation of euro is crucial, since long-term benefits greatly outweigh the short-term risks and costs.

Sources 

Emerging Europe, Poland Stays Cool on Euro Adoption, https://emerging-europe.com/in-brief/polandstays-cool-euro-adoption/;
NewEurope, Why Poland won’t join euro until currency is stronger? https://www.neweurope.eu/article/poland-wont-join-euro-currency-stronger/;
Polish Press Agency, PM's aide: No work currently on Poland joining euro zone, http://www.pap.pl/en/news/news,1230099,pms-aide-no-work-currently-on-poland-joining-eurozone.html;
Bilčík, V., et al, Rethinking V4’s Eurozone Dilemmas after the UK Referendum, https://www.amo.cz/wpcontent/uploads/2016/11/AMO_Rethinking-V4s-Eurozone-Dilemmas-after-the-UK-Referendum1.pdf ;
Centre for Euro-Atlantic Integration and Democracy, The Euro Dilemma: Success in the Baltics, Concerns in the V4 , http://ceid.hu/wp-content/uploads/2018/03/CEID-Euro-dilemma.pdf ;
Woodrow Wilson School of Public and International affairs, Graduate Policy workshop, Should Poland Join the Euro? An Economic and Political Analysis, https://wws.princeton.edu/sites/default/files/content/Should%20Poland%20Join%20the%20Euro.pdf; Czech, S. (2015);
The Political Economy of Staying Outside the Eurozone: Poland and Sweden Compared. Oeconomia Copernicana, 6(3), pp. 23-43, DOI: http://dx.doi.org/10. 12775/OeC.2015.019 .

The Dublin system: the(un)solved refugee crisis in Europe

Author: Elvita Mertins 

Image by Peter Schrank

The refugee crisis in Europe, caused by the emergence of the conflicts from North Africa and the Middle East, has been one of the most important issues and centered attention of European headlines in 2015. However, today, it seems that attention shifted to other issues and we have simply forgotten about it. 

Does it mean that Europe has finally managed to solve the refugee crisis? What steps have been taken to solve the refugee crisis? 

If we look at the European Union statistics on the number of asylum applications, a total number of first-time applicants went down from 1.2 million in 2016 to 650 thousand in 2017. In fact, first-time asylum applications in some member states, for instance Belgium and Sweden, have dropped significantly. However, more detailed analysis of this migration flow suggests a different kind of scenario. While total asylum seekers arrivals in the EU has decreased, more migrants between 2016 and 2017 attempted to cross the sea from Turkey to Greece, or from Libya to Italy. Also, there was a significant increase in boat migration from Morocco to Spain. The Mediterranean crossing remained deadly, with 3,139 people dead or missing in 2017, while thousands of asylum seekers are stuck in Italy’s and Greece’s refugee camps. All this blurs the illusion that the problems of the last several years have vanished or disappeared. EU officials have been working on one issue in particular – reformation of the Common European Asylum System, or so-called ‘the Dublin system’, which the EU has been attempting to fix since its beginning. The system consists of regulations, which has been evolved over the time replacing one another, and they are considered to be the cornerstone of the whole system (Dublin Convention, 1990; Dublin regulation II, 2003; Dublin regulation III, 2013). 

The Achilles‘ heel of the Dublin system and the most controversial debated issue is and has always been the lack of solidarity and the fair sharing of responsibility between the member states. In other words, there is a principle that the responsible member state will be the state through which the asylum seeker first entered the EU. And that is where the problem lies. The vast majority of illegal immigrants or asylum seekers enter Europe through countries like Greece, Malta, Italy and Spain. These countries are economically too weak to deal with the extensive number of immigrants on their own. Almost from the beginning of the Dublin system, southern European countries complained that they could not cope with a large refugee flows. For example, back in 2013, when the Dublin III Regulation was adopted, all the countries of the southern periphery of the Union supported a proposal which would allow illegal immigrants to apply for asylum in the country in which they have been apprehended, instead of in the country in which they had entered the European Union. However, this proposal was not approved and included in the amendment of the Dublin III Regulation. Since all three previous versions of Dublin regulation proved incapable of organizing burdensharing, in May 2016, the EU Commission has published a proposal for Dublin IV regulation. The Dublin IV introduces a mandatory asylum seekers relocation from countries receiving disproportionate numbers to other member states. At the moment, the proposal of the Dublin IV regulation is ‘at a reading stage’ and the regulation needs to be approved by both the European Parliament and the Council to take effect. Ever since the Commission brought the new proposal for the Dublin IV regulation, tensions between EU member states occurred. Czech Republic, Hungary and Poland did not agree with the EU established refugee quota, while the United Kingdom not only refused the quota system proposed by the EU, but also decided to leave the EU. The new proposal of Dublin IV regulation clearly challenges the solidarity between the member states, and with rampant populism and xenophobia all over Europe, it is doubtful that all states will share responsibility of refugee problem this time. A lack of solidarity between the member states may be another stimulus towards weakening the community as a whole. The EU’s inability to find the solution of the refugee problem have contributed to the debate concerning the fundamental principles - such as solidarity, integrity and cohesion - on which the European Union is premised. The question even arises of whether the EU is capable to provide efficient solutions to this kind of issue, pointing to the EU’s stability and coherence altogether. Thus, not to lose faith of its own citizens and its credibility among other international and regional organizations, the EU leaders must find proper measures to solve the refugee problem.

Sources

European Parliament, Legislative train schedule towards a new policy on migration; 

European Parliament, Reform of the Dublin system, http://www.europarl.europa.eu/RegData/etudes/BRIE/2016/586639/EPRS_BRI%282016%2958 6639_EN.pdf ; 

European Commission, Communication from the Commission to the European Parliament and the Council towards a reform of the Common European Asylum System, https://ec.europa.eu/home-affairs/sites/homeaffairs/files/what-we-do/policies/european-agendamigration/proposalimplementationpackage/docs/20160406/towards_a_reform_of_the_common_european_asylum_system_and_en hancing_legal_avenues_to_europe_-_20160406_en.pdf ; Eurostat, Asylum applications (non-EU) in the EU-28 Member States, 2006–2017, http://ec.europa.eu/eurostat/statistics-explained/index.php?title=Asylum_statistics ; 

Human Rights Watch, European Union events of 2016. World Report, https://www.hrw.org/world-report/2017/country-chapters/european-union; 

Human Rights Watch, Europe’s migration crisis, https://www.hrw.org/tag/europes-migrationcrisis ; Centre for European Reform, Europe’s forgotten refugee crisis, http://www.cer.eu/sites/default/files/bulletin_114_cmm_article3_0.pdf; 

Kamil Matuszczyk, Migration crisis in 2017 – challenges for EU solidarity, https://www.opendemocracy.net/kamil-matuszczyk/migration-crisis-in-2017-challenges-for-eusolidarity.

Should I stay or should I go?

Author: Giorgia Esposito

Many people around the world have decided to live in a different country from the one that they grew up in. One of the main reasons is that a foreign culture may be more suitable to their personality than their native one. A lot of people are attracted to another country because they like different traditions and customs. Moreover, living abroad is the best solution to get away from it all. It’s great to leave your home country and explore something new but there are always two sides of every coin. You have to face the challenge of experiencing a different way of life. Let’s talk about the city I live in, Palermo. It is famous for its history, culture and food. Many people are also attracted to this city for its good weather. On the other hand, the city suffers many troubles. You may not feel comfortable with the way in which people interact with each other. An example could be that people tend to treat you as they are your relatives, being sometimes intrusive. Even the pigeons in Palermo have zero spatial awareness. Another issue is the public transportation system: if you don’t have a car, you’re very limited in your movements. The best way to get around is definitely on foot. By the way, it is also true that Palermo is a hidden city since you need to scratch beneath the surface in order to discover the “iceberg under the water".

In conclusion. you shouldn’t be afraid to try out new things. It is wonderful to live abroad and be immersed in a culture that is extraordinary to you. My advice to anyone who is thinking about going to a different country is to experience as much as possible every different lifestyle.