rszula Grzelonska - the favourite candidate to take over as new Polish central bank chief after Leszek Balcerowicz - was today reported by first by the Polish news agency PAP and later by Reuters as saying that she had doubts about whether Poland should adopt the euro.

 Grzelonska's comments are obviously negative for Polish markets. First, they indicate we will soon have a dove (and maybe an economic populist) in charge of the Polish central bank (NBP). Second, they underline the fact that Polish euro adoption is becoming less and less likely. The outlook for Poland to adopt the euro has been a main anchor of expectations in the Polish FX and fixed income markets over the past few years.

 All in all, even though one might agree with Grzelonska's comments, they are a cause for concern and unfortunate, since they signal a marked change in monetary policy in Poland towards much less prudence than under the steady leadership of Balcerowicz. Balcerowicz has often - rightly or wrongly - been criticized for being too hawkish. That will certainly not be the case with Grzelonska if she is eventually appointed new NBP chief. Balcerowicz’ term of office at the NBP expires in January.

 The zloty initially weakened in response to Grzelonska's comments (then rebounded again). The fairly strong market reaction clearly illustrates that, already before being an official candidate, Grzelonska is influencing Polish markets and monetary conditions. Speculations over who will succeed Balcerowicz at the top of the NBP will clearly be a significant theme in Poland in November and December.

 While Grzelonska is not at all certain to become new NBP governor, her dovish views are obviously much more in line with the views of the government and Lech Kaczyński, the president. Kaczyński is already on record for saying that he wants an NBP governor that is not like Balcerowicz. This is not good news for investors. Note, though, that Grzelonska also said today that she thinks a referendum on Polish euro adoption is ill-advised – contrary to the views of the Polish president and the government. .