(Repeats story published late on Monday)
* Poland's government steers away from euro entry date
* Czechs OK measures for entry by 2017
* Budgets of both countries seen as main hurdles to euro
By Robert Mueller and Gabriela Baczynska
PRAGUE/WARSAW, Feb 8 (Reuters) - Poland and the Czech
Republic eased away from any notion of quick euro adoption on
Monday, approving convergence plans that looked set to delay
euro zone membership until the second half of next decade.
The decisions follow a year of vanishing euro hopes for
European Union newcomers after painful economic downturns caused
budget deficits to balloon far beyond the level required to swap
out their local currencies.
They also reflected growing calls from west European
politicians for more caution in convergence plans as well as a
tendency by some capitals like Prague to embrace the flexibility
that a free-floating currency affords them in times of crisis.
Polish ministries approved a plan that included a scheme to
cut the country's ballooning budget deficit to the EU prescribed
3 percent of GDP by 2012, although analysts panned it as too
optimistic and lacking details.
It follows a rowback from Prime Minister Donald Tusk's
government, which had initially planned to adopt the euro in
2012 but has since scrapped that, saying the crisis had made
that date impossible.
"The requirements (for entry) have not been met for the
present moment, which makes it impossible to set a new, credible
date for Poland's euro adoption," the convergence plan said.
"However, swift and at the same time safe passage into the
euro zone is the government's intention, as reflected in the
preparation work conducted at the finance ministry."
The plan, which like the Czechs' will be submitted to
Brussels, included growth forecasts of 3 percent this year, 4.5
next year, and 4.2 in 2012.
It also included a forecast that saw the public deficit fall
from over 7 percent last year. Analysts have criticised the
government's plan as being too ambiguous and say optimistic
figures belie an unwillingness for reform.
"The numbers suggest that the government is unwilling to
deliver any comprehensive fiscal adjustment and that its deficit
reduction schedule on paper is premised on an extremely benign
and (internally inconsistent) scenario," said Michal Dybula, an
economist at BNP Paribas.
"The plan should be seen as bonds and currency negative over
the medium-term horizon."
CZECHS AVOID DATE
Analysts say Estonia may join the euro next year, but other
countries will struggle to meet the euro zone's entry criteria,
which includes meeting budget deficit, inflation, currency
stability, and other requirements.
The Czech plan, which did not actually set a date for euro
entry, follows a demand from Brussels for Prague to cut its
fiscal gap, which hit 6.6 percent of GDP last year, to the
EU-prescribed level of 3 percent of GDP by 2013.
It also comes ahead of a May general election in which
parties have clashed over whether cutting costs or spending more
is the best way to recover from the global economic crisis.
Finance Minister Eduard Janota said the programme assumed
trimming the public sector gap to the required level in 2013 or
in 2014, which he has said would allow for euro adoption three
years later, after a stay in the ERM 2 currency grid.
Prime Minister Jan Fischer said the plan assumed "painful"
savings of around 100 billion crowns ($5.23 billion) by 2013.
But the plan may have limited relevance because the
caretaker cabinet will be replaced by a government after the
election and the new administration may take a different course.
In December, the government and the central bank agreed
there was no point in setting a euro entry target date now as
the economic crisis worsened the country's preparedness for the
adoption. []
(Reporting by Michael Winfrey; Editing by Kenneth Barry)
