Chapter 6: Monetary and Fiscal Policy in Poland During EU Accession
6. Monetary and ﬁscal policy in Poland during EU accession Lucjan T. Orlowski* 6.1 INTRODUCTION The main objective of this chapter is to review the ﬁscal and monetary policies of Poland for EU accession and to extract their guiding precepts. Only the most essential aspects of ﬁscal and monetary convergence are examined, with some attention to institutional convergence. An in-depth analysis of institutional convergence falls beyond the boundaries of this study, as its main focus is on the systemic foundations of macroeconomic stabilization policies during the economic transition and in the course of preparations for EU accession. The chapter also examines policy options for the post-accession macroeconomic policy strategy which will focus on preparations for adopting the euro. This chapter underlines the importance of imposing and preserving ﬁscal discipline and political stability on the road to Poland’s accession to the EU which took place on 1 May 2004, and to the future adoption of the euro. Special attention is drawn to ﬁscal restructuring and bringing about compliance with the European System of National Accounts. In addition, the implications of the expected net transfers from the EU budget are examined. The evolution of Poland’s monetary policy, which is marked by a passage from a simple policy framework based on a hard peg to a modern, complex regime based on direct inﬂation targeting (DIT) is examined. With respect to the tasks related to monetary convergence to the euro, the main analytical hypothesis is that the current strict DIT regime is not...
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