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– How many Poles can fit in a small Polski?
– Put half a kilo of meat in it and you will find out! – The people of Pest in Poland, who were struggling with severe economic difficulties in the 1980s, once enjoyed these grumpy jokes. But in the last 25 years, the Poles have run very hard, being the most important not only of the Visegrad Four, but of all the EU member states of Central and Eastern Europe, due to their size and strategic position.
According to Viktor Orbán, they will now run even bigger. In his regular Friday radio interview, the prime minister said:
WE WILL BE SURPRISED THAT IN TEN YEARS POLAND WILL BE THE NEW GERMANY OF EUROPE
He did not elaborate on how this would happen, in any case, the words of his early Polish friend Jarosław Kaczyński resonate with this. The chairman of the right-wing Justice and Justice party recently said that by 2033 they will reach the EU average and by 2040 the Germans will be mature.
Tempo catching up
All of this seems like a great challenge: one of the world’s leading exporting economies, Germany’s six times the size of Poles, and its country has more than twice the population. Furthermore, Germans are the biggest contributors to the EU and Poles are the main beneficiaries, and the shorter their backlog, the less they can expect from the EU budget.
Now, the coronavirus epidemic is further complicating the situation, as in many other countries. In the second quarter of this year, Polish GDP fell 8.2 percent and a total decline of 4.6 percent is expected for 2020. The Warsaw government also estimates that by the end of the year, the unemployment rate will rise to 8 percent from 5.2 percent at the end of last year.
But optimism is not entirely unfounded, at least if we start from it: the future trend can be deduced from the last 20-25 years. On average, Polish economic growth of 4% is impressive, three times the EU average. When they joined the union in 2004, together with us, their gross domestic product (GDP) in purchasing power parity was 14,000,800 euros per year and per capita. Today it is 26,000, while the EU average is 35,000 euros.
However, experts are skeptical, even the Poles. Aleksander Leszek, chief economist of the Warsaw think tank of the Civil Development Forum, told the German public media news site Deutsche Welle: Kaczyński’s words had a more political rhetorical significance in the Polish election campaign in recent months. (The vote was won by Kaczyński’s man, President Andrzej Duda, who campaigned on family policy in July.)
Without reforms, it will be difficult to reach the EU average in 2033, but with any luck. But catching up with Germany too? That is not possible!
– I will be.
According to an analysis by The Economist from last year, it is a problem that the economies of the Visegrad Four, including the Poles, are too exposed to external influences. Behind its rise, London Business Weekly sees four reasons:
- the EU supports them generously
- work with a mass of their citizens in the West (mainly in Germany), which increases purchasing power
- they were helped by a favorable environment; only again: mainly to its biggest trading partner, the German economy
- They started from a very low base, which makes the boom particularly spectacular.
Boring but predictable track
Speaking to the Index, László Csaba, professor of economics at the Central European University (CEU), agrees with the suggestion: Kaczyński’s expectations are more in line with a motivational coach who will encourage his team to win than to have an economic base. realistic to catch up with the Germans. The member of the Hungarian Academy of Sciences sees the reason for the success of the Poles in economic policy: “they dared to be boring”, and regardless of the color of their governments, they followed textbook-like solutions to the throughout the electoral cycles.
And that
- sustainable public finances, avoiding indebtedness
- lower the unemployment rate
- the stability of the exchange rate of the national currency, the zloty
turned out.
The stable economic environment also attracts investors, with Poland receiving most of the investments in Central Europe.
One might expect that one euro would be worth four zlotys. If they wanted, they could introduce the euro, but for political reasons they didn’t want to.
– said Csaba, who at the same time sees the following problems in the structure of the Polish economy, which could be remedied with reforms if they really wanted to surround the Germans once:
- their economy is not competitive enough, it is difficult to start a company with them, for example
- do not excel at innovative solutions
- they do not have universities at the forefront of Europe
- could do more to eradicate corruption
After decades of the Polish “economic miracle” (German example: Wirtschaftswunder), the economics professor now sees the Polish economy as a rather deteriorated model and also warns against jumping to conclusions about the past for the future.
If the structural reforms remain frozen, the middle income trap, not the catch-up, is waiting for the Poles. It is often the case in the world economy that, after a decades-long boom, growth potential stagnates and a state of near permanent stagnation develops.
– says László Csaba, citing Japan or Russia as examples.
Top image: Prime Minister Viktor Orbán (s) at the Visegrad Group Summit (V4) in Warsaw on July 3, 2020. MTI / Prime Minister’s Press Office / Zoltán Fischer
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