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Grayphil

Poland Changing To Euro

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evening all!!!!

this forum has always been of great help to me,

my job is on a cruise ship, and i have been reading this forum for a few years, I have friends all around the world, and lots are very concerned, the one who is having a few drinks with me now is a polish guy, i have worked with this guy for years and both he and myself are very curious about what is going to happen when the Zloty changes to Euro in 2012,

His morgage is currently in swiss franks, he doesnt know exactly how much his morgage is but every month he pays approx 1000 dollars,although he pays for his swiss franks in zloty. he bought his house 5 years ago and has a 15 year morgage.

when poland changes to Euro will his morgage in swiss franks increase or decrease???

I know this question is irrelevant to most and non beneficial to answer, but if anyone has any ideas please let me know!!

I didnt know where else to ask, as most information is biased and this website has more or less been spot on with all the feedback in the past!

Thanks in advance to anyone who replies!!!!

Grayphil!!!

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evening all!!!!

this forum has always been of great help to me,

my job is on a cruise ship, and i have been reading this forum for a few years, I have friends all around the world, and lots are very concerned, the one who is having a few drinks with me now is a polish guy, i have worked with this guy for years and both he and myself are very curious about what is going to happen when the Zloty changes to Euro in 2012,

His morgage is currently in swiss franks, he doesnt know exactly how much his morgage is but every month he pays approx 1000 dollars,although he pays for his swiss franks in zloty. he bought his house 5 years ago and has a 15 year morgage.

when poland changes to Euro will his morgage in swiss franks increase or decrease???

I know this question is irrelevant to most and non beneficial to answer, but if anyone has any ideas please let me know!!

I didnt know where else to ask, as most information is biased and this website has more or less been spot on with all the feedback in the past!

Thanks in advance to anyone who replies!!!!

Grayphil!!!

You say that your friend pays about 1,000 dollars each month. Is his salary paid in dollars? If so his exposure is to the USD/SWF exchange rate and his mortgage has nothing to do with the Zloty.

But if I am confusing this and he does have exposure to movement in the Zloty/SWF rate then the cost of his mortgage will obviously vary according to the way the exchange rate moves.

If, for example, the Zloty/Euro exchange rate is 0.33 on the date in 2012 when Poland adopts the euro then Poles will all get 1 euro for every 3 Zloties and on that day his mortgage will not be any cheaper or more expensive but thereafter his foreign exchange risk will be based on the movement of the euro/SWF.

Taking a mortgage in a foreign currency with lower interest rates can seem attractive but exchange rate movements can wipe out the interest rate benefit very quickly and turn the whole deal negative. There are many Australians who rue the day that (some years ago) they took SWF mortgages when the rate was 2 1/2% rather than pay 18% for an AUD mortgage and then saw the AUD/SWF rate move 35% against them.

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Is the arrangement that he pays the Swiss Franc debt using Zloty?

If so that is quite inefficient if he is earning in Dollars as there are 2 currency changes instead of 1.

In terms of Zloty or Euro as against the Swiss Franc he should be ok, because as has already been said he is paid in Dollars. The only possible issue is if the Dollar gets weaker again as clearly he'd need to earn more Dollars to pay off a certain number of Swiss Francs.

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Guest KingCharles1st

Wow- I didn't realise this was about to happen.

Please correct me if I'm wrong, but this could have a huge effect on the whole min wage / Labour picture for the UK?

For example my barber is Polish, he sends an awful lot of money home each month, will he be earning comparatively more, or less, sending home more or less? Currently he reckons he is earning in real terms around x5 as much as he would be in Poland.

Will this make the Polish workforce more or less competitive in the UK- how will this change pan out?

Edited by KingCharles1st

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Guest KingCharles1st
If mandelslime has his way by 2012 UK will have adopted the euro as well.

I read that too...

So then, the minimum wage will be in Euro's right across the board, so Polish workers will get paid the same hourly rate if they work in ANY Euro country then?

So there is no point in them leaving their own country, they will have the pleasure of having their wages effectively increased by 500% just for working in Poland, and they will get nuclear HPI

:unsure:

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when poland changes to Euro will his morgage in swiss franks increase or decrease???

As Poland will change to the Euro at the exact exchange rate on the day that they do it, his mortage, on the day, will be exactly the same amount (relative to his earnings) as before.

Or are you asking us if the Zloty will increase or decrese in value before Poland joins? Sorry, I left my crystal ball behind today.

tim

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Thanks all for your replys,

I will ask my friend later when he finishes working,

I was under the weather last night after far too many but i think one of the points raised about immigration etc is very important, if various EU countries now adopt the Euro it must have huge immigration implications,

My girlfriend is Latvian she says her country's currency has narrowly avoided being devalued, and also is going to be taken into the Euro in 2012, and after speaking with colleagues from Bulgaria and Romania they are also under the impression that 2012 is the year that they will be accepted into the Euro.

Im not sure if any of this is true does anyone know where the infomation can be found??

Thanks

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Thanks all for your replys,

I will ask my friend later when he finishes working,

I was under the weather last night after far too many but i think one of the points raised about immigration etc is very important, if various EU countries now adopt the Euro it must have huge immigration implications,

My girlfriend is Latvian she says her country's currency has narrowly avoided being devalued, and also is going to be taken into the Euro in 2012, and after speaking with colleagues from Bulgaria and Romania they are also under the impression that 2012 is the year that they will be accepted into the Euro.

These dates were the predictions before the crisis and assumed that their currencies were stable for interveining the period.

Countries are not allowed into the Euro on some "timetable", they are admitted after they have shown a period of meeting the criteria.

All bets are off for new countries to enter, most of them that were close to being allowed to join are now back to stage 1. 2012 is a pipe dream for most of them

tim

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