Poland, Hungary eager for euro as zloty, forint fall

                                
 By Marcin Grajewski
                                
 BRUSSELS, Feb 17 (Reuters) - Poland and Hungary said on
Tuesday they were keen to adopt the euro as their currencies
plunged after a warning from Moody's that the region could
suffer a sharp recession that could hit the ratings of local
banks.
                                
 Moody's warned the recession in emerging Europe
will be more severe than elsewhere due to the region's large
imbalances. [ID:nLG25344]
                                
 The Polish zloty <EURPLN=> fell to near all-time lows
against the euro and the Hungarian forint <EUHUF=> set a new
record low. Polish Prime Minister Donald Tusk said the
government might start selling euros on the market to stop the
zloty's fall if it reached 5 zlotys to the euro.
                                
 Polish deputy finance minister Ludwik Kotecki said Poland
was still considering 2012 as the date for euro adoption and
could start talks on entering the Exchange Rate Mechanism 2 -- a
two year currency stability test -- in a matter of weeks.
                                
 "As I have said, they (ERM2 entry talks) are possible late
in February or early in March," Kotecki told reporters at an
economic seminar in Brussels.
                                
 Asked if Warsaw's goal of adopting the euro in 2012 was
still possible he said: "Yes.., we will be reacting as the
situation develops."
                                
 Hungary's deputy central bank governor Ferenc Karvalits was
also keen on a rapid adoption of the single currency.
                                
 "We still think Hungary should join the euro zone as soon as
possible," he told the economic seminar, adding the country also
needed structural reforms.
                                
 Hungary abandoned several euro target dates in the past and
has no target date now. Prime Minister Ferenc Gyurcsany told
Reuters on Monday that euro adoption could not happen before
2012, though there was no reason for it to be later than in
2014.
                                
 Karvalits said that Hungary should lock its forint in the
ERM 2 only when it is safely on track to meet other criteria
needed to adopt the euro, such as low inflation and interest
rates, a deficit below 3 percent of GDP and debt below 60
percent of GDP.
                                
 The European Central Bank's deputy Director-General of
Economics Hans-Joachim Kloeckers, also present, cautioned that
countries should not rush into the euro until their economies
become are more aligned to those already using it.
                                
 "Achieving sustainable convergence before euro entry is also
very much in the interest of the country involved," he said.
                                
 "Without such convergence the monetary policy stance of the
ECB is likely to be inappropriate for the country and the
country may face the risk of serious boom and bust cycles," he
said.
                                
 (Additional reporting by Krisztina Than in Budapest)
                                
(Reporting by Marcin Grajewski, writing by Jan Strupczewski,
editing by Ian Jones)