The writer, late president of the National Bank of Poland, submitted this article before he died in the Smolensk air crash on Saturday. It is published by agreement with Mr Skrzypek’s wife, Dorota, and the Bank

Poland has had a relatively good crisis. Last year, we were the only country in the European Union to register economic growth. Poland’s real gross domestic product expansion of 1.7 per cent contrasted with an average EU decline of 4.2 per cent, and contractions of roughly 5 per cent in Germany, Britain and Italy. This year, when Europe has been plagued by concern over excessive Greek debt, the Polish economy is projected to grow 2.7 per cent, accelerating to 3 per cent in 2011, according to the International Monetary Fund. The one-time problem state of central Europe stands out as a success story in a worrisome European landscape.

One important reason for this is that, as a non-member of the euro, Poland has been able to profit from flexibility of the zloty exchange rate in a way that has helped growth and lowered the current account deficit without importing inflation. Poland is committed eventually to entering the single currency. But recent experience – both the problems in the eurozone and our own generally positive circumstances outside it – make us question whether we should submit quickly to a rigid exchange rate regime as a pre-condition for entry.

The decade-long story of peripheral euro members drastically losing competitiveness has been a salutary lesson. Another conclusion from the Greek imbroglio is that there is no substitute for countries’ own efforts to improve competitiveness, boost fiscal discipline and increase labour and product market flexibility – whether or not they are in the eurozone. Hard work brings its own reward. Interest rates on 10-year government debt issued in zloty are now 5.6 per cent – compared with about 7 per cent on 10-year Greek debt.

In the immediate aftermath of the 2007 subprime mortgage upheaval, Poland – like other central and eastern European countries – was hit by capital flight and fears of economic depredation. The period 2007-2008 was tough. But a combination of a propitious domestic economic structure and appropriate fiscal and monetary measures has yielded a surprisingly favourable escape route. With 38m people, Poland gained from having a relatively large and self-sufficient economy, and a financial system that is well-capitalised, profitable and resisted the temptation to diversify into exotic products.

Because Poland’s currency is not bound by the Exchange Rate Mechanism II, we have been able to adjust the value of the zloty in line with domestic requirements. Between 2008 and 2009, Poland’s real effective exchange rate, allowing for differences in unit labour costs, fell by nearly 20 per cent – a significant factor behind the narrowing of the current account deficit. During this process, we brought about a significant catch-up in GDP per capita, now at 60 per cent of the EU average compared with 49 per cent in 2004 when Poland joined the EU.

In the recent turbulence it has been widely recognised that a strong and independent central bank is in the best interests of the economy. We increased the scale and lowered the cost of central bank lending. Foreign exchange reserves rose to more than $85bn, from a low of $65.7bn in 2007, underlining foreign confidence.

The government last year rightly decided to relax fiscal policy and allow the automatic stabilisers to function, with tax income falling and social security payments rising during the economic slowdown. But fiscal expansion has now gone too far. Given the relative buoyancy of the economy, the public deficit (7 per cent of GDP this year, up from 2 per cent in 2007) is now far too high.

The necessary structural reforms will, over the longer term, improve Poland’s ability to meet euro entry criteria. But we must temper the wish to adopt the euro with necessary prudence. We should not tie ourselves to timetables that may prove counterproductive. Solid economic growth and sensible policies on debt and deficits are possible both within and outside the eurozone. Nations in a hurry to join the euro may end up missing their overriding objectives. Those such as Poland that do their homework and take their time may end up with a more sustainable economic structure that will make them better equipped for the euro in the long run.

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