Poland's euro convergence plans may be harmed by the resignation of Deputy Finance Minister Stanislaw Gomulka, who was in charge of public finance reform, the central bank governor said on Friday. The governor's comments came as Gomulka, widely seen as dedicated to euro adoption, accused Poland's centre-right government of lacking political will to push through reforms.
Another deputy finance minister, Elzbieta Suchocka-Roguska, will take over the duties of Gomulka, who resigned on Wednesday."In the context of Gomulka's resignation the risks for the euro convergence plans are rising," central bank governor Slawomir Skrzypek told reporters.
A top economic adviser to the government, Michal Boni, said Warsaw remained committed to the euro convergence programme."Whether with or without deputy minister Gomulka, the convergence programme will be carried out," Boni told Reuters.
But echoing Skrzypek's concern, prominent economist and former Monetary Policy Committee member Dariusz Rosati said Gomulka's departure could harm Poland's image in Europe. "This will negatively affect the government's standing in Brussels," he told Polish television on Friday.
"This will mean that a supporter of public finance reform, cutting the deficit and adopting the euro has not secured the government's support. This may mean the government is not as reform-minded as we thought," Rosati added.
In his first public comments since his resignation, Gomulka said in two interviews published in Polish newspapers on Friday that the government seemed incapable of taking decisions.
"There is a kind of suspension of decision-making. There is a lack of clear positions and decisions because of political concerns," Gomulka told the Dziennik newspaper. "The assumption that if a law clears parliament then it will get blocked by the president is paralysing all thought of reforms," he said.
President Lech Kaczynski, a conservative, has extensive veto powers. He is the twin brother of former prime minister Jaroslaw Kaczynski, whose conservative Law and Justice party lost last October's election to the Civic Platform, and who was replaced by the Platform's leader Donald Tusk.
In an interview for the Gazeta Wyborcza newspaper, Gomulka directly criticised Tusk."The prime minister does not have a very strong initiative to resolve arguments about (government) programmes," he said, adding that Tusk lacked strong advisers."I did not feel the political support from the prime minister for my reform efforts."
Commenting on Poland's general economic outlook, Skrzypek told reporters inflation - at 4.1 percent in March, well above the central bank's 2.5 percent target - will likely spike again around the start of the third quarter. Inflation in central Europe's biggest economy has been accelerating and the Polish zloty has also hit its highest levels in seven years.
"The current zloty levels are increasing threats for our exports. The Monetary Policy Council should seriously take into consideration the situation in currency markets."Half of analysts polled by Reuters expect another interest rate hike at the next MPC meeting on April 29-30.