Source AP ©

Poland adopts the euro by 2012

Poland will likely adopt the euro by 2012 or 2013, but needs to be cautious about the possible impact on living costs for Poles, prospective Prime Minister Donald Tusk said Tuesday.

"Caution is warranted," said Tusk, whose Civic Platform Party won the most votes in Oct. 21 general elections. He told reporters at a news briefing that his government would carry out "simulations on how this step will affect the cost of living."

Tusk is expected to form a coalition government with the Polish People's Party, also known in the past as the Polish Peasants' Party, after he is formally designated to do so by President Lech Kaczynski later this week.

The prime minister-to-be told reporters that he and People's Party leader Waldemar Pawlak, who will be deputy prime minister and economy minister in the new Cabinet, agreed that Poland should "move quickly" to meet eligibility criteria for euro adoption.

The EU's Maastricht Treaty sets strict requirements for public finances, domestic interest rates, inflation, and currency stability for all euro-zone entrants.

For most Central European countries, the most challenging requirements have been keeping general government deficits below 3 percent of gross domestic product and annual inflation within 1.5 percent of the average in the three lowest-inflation EU countries.

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