For decades, Brussels officials have talked of “a Europe of variable geometry”, a union in which different groups of countries can do things in their own way.
Such a Europe is very definitely on display when it comes to the single currency. That the euro is the denomination used in 19 of the 27 member states of the European Union is widely known.
Less commonly understood is the fragmented geography of the euro area beyond those 19 countries.
Poland leads the pack
For a start, there are the four mini-states that have adopted the euro – Andorra, San Marino, Monaco and the Vatican – and the two non-EU members that have started using the euro without so much as a by-your-leave: Montenegro and Kosovo.
By contrast, there is Sweden, which is obliged to join the single currency but which has given itself an opt-out by making compliance with the rules of the euro subject to a referendum. Denmark has a legal opt-out, as did Britain, and, for collectors of trivia, the British sovereign bases on Cyprus are the only UK territory for which the euro is the currency.
Finally, there are the east European countries that are obliged to sign up for the euro at some point, but which mostly show little sign of doing so. Of these economies, the most substantial is that of Poland.
When the country joined the EU in 2004, there was talk of a “big six” grouping that could manage Europe’s affairs, with Poland bracketed with Spain, Italy, France, Britain and Germany. Today, Poland’s relations with Brussels are strained, with the ruling Law and Justice party accused of trying to compromise judicial independence.
Good economic performance
But this does not appear to have impacted the country’s currency, the zloty. Currently, it trades at €0.22 to the euro, just as it did one month ago, on 20 June.
A year ago the rate was €0.23 on 20 July 2019, and five years ago, on 31 July 2015, it changed hands at €0.24.
In part, this may reflect economic stability. According to America’s Central Intelligence Agency: “The Polish economy performed well during the 2014-17 period, with the real GDP growth rate generally exceeding 3%, in part because of increases in government social spending that have helped to accelerate consumer-driven growth.” But it added: “Poland faces several systemic challenges, which include addressing some of the remaining deficiencies in its road and rail infrastructure, business environment, rigid labour code, commercial court system, government red tape, and burdensome tax system, especially for entrepreneurs.”
According to the European Commission: “Poland does not have a target date to adopt the euro, but aims to do so as soon as possible. Adopting the euro is one of the top priorities of the Polish government.” There are signs that this may no longer be the case.