As we pointed out last week, the number of eurozone outs remaining outside the EU banking union is critically important for a number of different reasons. As the second largest non-euro member, Poland's decision will be an important one, not least because it will also affect the choices made by its neighbours. On our new blog platform at Rzeczpospolita - Poland's second most widely read daily - Open Europe's Pawel Swidlicki takes a closer look at the choices facing the government:
"What does this mean for Poland? Well, since 2008, EU states have in total offered around €4.7 trillion in guarantees, capital, liquidity and asset relief measures to the European banking sector. Under an illustrative scenario, were a joint resolution fund been in place during the crisis (we assume the bailed out countries would have been unable to participate) the Polish state would have had to stump up over €200bn – 74% of its GDP – whereas in reality it only had to put up €9bn. These figures are clearly purely illustrative but they highlight that such a burden sharing arrangement – based roughly on each state’s GDP and population size – would be hugely iniquitous given that Polish banks only hold 0.73% of EU wide bank assets. It should not be forgotten that this is the clear and stated, but also necessary (if it is to offer any solution to the crisis), end goal of the banking union."
"Likewise, for similar reasons, Poland and other EU member states should be hugely pleased that the UK, with its €10.2tr of bank assets – four times the size of the German economy – is staying out of the EU banking union, and that Polish taxpayers will in no way be exposed to any of their associated risks. Fortunately, there is no realistic prospect of Poland joining the euro within the next couple of years, and the government is absolutely right not to jump the gun on declaring whether it will join the banking union or not, especially with the additional safeguards detailed above. Poland’s interests will best be served by staying out in the immediate future and seeing how the later stages, such as the joint resolution scheme, develop."