| Population | 38.15 million |
| Surface Area | 312,685 km2 |
| Capital | Warsaw (Warszawa) |
| GDP (PPP) 2011 | EUR369.6 billion |
| Corruption level (Transparency International Corruption Perception Index 2012; 100-90 = very clean, 0-9 = highly corrupt) | 41 (ranking: 58) |
| Current government | Coalition of centre-right Civic Platform with the centrist, agrarian Polish People’s Party |
| Three largest cities | Warsaw, Cracow, Lodz |
| Baltic Sea coastal regions | Pomerania, Varmia-Masuria, West Pomerania |
By Lidia Puka
Since September 2011, the situation in Poland developed against a backdrop of European economic turmoil and political scepticism towards European integration. Domestically, it was characterised by political continuity and relative economic stability. For the first time in modern Polish history, the government has been re-elected. The GDP has been growing, although more slowly than before. Poland’s interests have been linked more closely, and more vocally, with the EU and the major European players: Germany and France. Poland has tried to position itself in the new EU governance structure in an effort to avoid the worst-case scenario of being left aside in the widening double-speed Europe. These pro-integration aspirations were inspired by the Polish EU Presidency in 2011 and the 2012 UEFA European Football Championship. However, the popularity of the government is decreasing, while domestic economic growth slows down, showing the need for economic reforms. In this context, the relatively healthy northern European economies are a possible source of growth and best practice sharing – an incentive for enhanced co-operation.
Government
The coalition government of Donald Tusk of the centre-right Civic Platform and the centrist, agrarian Polish People’s Party, is approaching its mid-term. The re-election of the government coalition on 9 October 2011 was unprecedented in the post-Cold War history of Poland. The coalition remains stable, and has not been affected by an unexpected change of the leader of the Polish People’s Party last November. Nevertheless, since the re-election, opinion polls have shown decreasing support for the government. In March 2013, the Civic Platform had only a 1% lead over the main opposition party, right-wing conservative Law and Justice. To a large extent, the popularity of the opposition increases because of the worsening economy, rather than targeted political actions. The latter – such as a vote of no confidence, or the creation of the ‘external government of experts’ – have so far been unsuccessful.
The elections of 2011 have also brought about a qualitative change in the social and political debate in a traditionally catholic and conservative society. Entry into Parliament of the social-liberal and anticlerical party resulted in highly debated motions, such as on granting rights to homosexual partners, or liquidation of some of the financial privileges of the Catholic Church.
Policies
The second term of the Tusk government has provided continuity in both domestic and foreign policies. The major problem of this middle-sized country, dependent on the European markets and aspiring to gain more power within the EU, was how to react to the European economic slowdown, and at the same time to strengthen Poland’s impact within the EU. As an answer to this challenge, the government has been consequently communicating a pro-European stance. The EU has been presented as a platform for exerting greater political and economic power during the Polish Presidency of the EU Council, and in the time of the Multiannual Financial Framework negotiations. Moreover, Poland used the occasion to express ideas for shaping European affairs and ally with the ‘majors’, like Germany and France. In a speech in Berlin in December 2011, Foreign Minister Sikorski presented his vision of strengthening the EU’s governance system, and called for a more active role of Germany in the process. At the same time, the enthusiasm of Poland was limited by economic feasibility. On the one hand, the country confirmed the will to join the Eurozone by 2017, and gave a green light to the fiscal pact in February 2013. On the other, due to a fear of losing competitiveness, Poland opposed the Commission’s proposal on setting binding CO2 reduction goals for 2030, regarded as having a limiting effect on the energy-intensive sectors.
In addition to the above, Poland has maintained its traditional focus on the Eastern dimension within its foreign policies. In Polish-Russian relations, the government upheld a moderate discourse while Foreign Minister Sikorski underlined that the EU should be the right forum of solving the controversies with Russia. Additionally, in contrast with political hardships, in 2012 Poland has rediscovered the Eastern export markets: Russia, Ukraine and Belarus.
Domestically, the opposition interpreted these pro-European politics as a ‘loss of sovereignty’, an argumentation supported by a quarter of Poles. The critique also concerned the discontinuities between the Polish and Russian reports on the governmental plane crash in Russian Smoleńsk in 2011, and the fact that the plane has not yet been returned to Poland. The government has also been criticised by Law and Justice, which raised allegations of linkages between the government with the bankruptcy of the lender and investment firm, Amber Gold, and its daughter airline company, OLT, in 2012.
Economic situation and anti-crisis strategies
Domestic economic policy was just one of the factors which contributed to the continuous growth of the GDP in Poland. In general, the economic policy has been based on the ideas of liberalisation, rather than protectionism, with measures undertaken to stimulate consumption by, e.g. lowering the interest rates in 2012 while avoiding tax increases.
The robust infrastructural investments in transportation and energy have remained the drivers of the Polish economy. In a public address in October 2012, Prime Minister Tusk stated that the government wishes to spend eight times more on infrastructure than on sciences while at the same time maintaining a high level of investment in the modernisation of army equipment, liquidation of a part of the pension privileges, and introduction of a ‘mineral tax’ for companies, partially as an answer to the activities of foreign oil and gas companies in Poland. Despite the crisis, the Poles continued spending.
At the same time, a set of external factors have diminished the effects of the crisis on Poland. Firstly, tying the exchange rate of the Polish Złoty to the Euro helped stabilise the national economy. The weakening Złoty (between September 2011 and May 2012) has increased the competitiveness of Polish exports. As a result, in 2012, despite a general slowdown in trade exchange, the national trade balance remained positive, with an improvement of export to the majority of the European markets (including Germany, France, and Great Britain) as well as to developing countries and emerging powers, such as India and Brazil. This was further enhanced as Germany’s economic recovery – Poland’s main economic partner – has provided a boost to the Polish economy. Secondly, undoubtedly, the absorption of EU funds had a positive effect on the Polish economy. As the Multiannual Financial Framework 2014-2020 increases the payments for Poland up to EUR105.8 billion, this trend is likely to continue. Thirdly, small and medium enterprises (SMEs) played a balancing role during the crisis. In general, SMEs are responsible for generating over half of the GDP in Poland. They are flexible, and have an easy time adjusting to changing market conditions.
On the other hand, these factors show that the Polish economy strongly depends on external factors. Moreover, the future may not be that rosy. Internal consumption has slowed down with the rise of the unemployment rate to above 14% in 2013. Also, governmental rhetoric has changed in the end of 2012. The government underlines that difficult economic times will come in 2013 and 2014 and that Poland no longer presents a ‘green island’ on the map of crisis-hit Europe.
Poland and the Baltic Sea Region
Poland’s political interest in Northern Europe has increased. It is an element of the North-South Axis between the Baltic/Nordic and Visegrad countries. The first meeting of these 12 countries’ foreign ministers in Gdańsk on 20 February 2013 was a starting point for dialogue between these countries.
Moreover, Poland seeks to redefine its interests in the changing paradigm of regional co-operation, caused by the renewed interest of Russia in energy and transportation investments, and close co-operation between Russia and Germany, and adjust to the changing role of the regional institutions, such as the CBSS. The country can benefit from the modernisation of the Russian Baltic Sea regions. It is, however, in Poland’s interest to preserve the regional values of democracy and the human dimension of the co-operation. Additionally, the country also seeks to develop existing EU instruments for regional co-operation, including the EU Strategy for the Baltic Sea Region (EUSBSR). Its revision under the Polish Presidency of the EU Council resulted in an improvement of the strategy’s mechanisms. Additionally in the strategy’s new action plan, Poland took on the role of co-ordinator of the new priority area ‘culture’, jointly with Schleswig-Holstein.
At the same time, the crisis triggered the development of bilateral political relations in the Region, especially with Sweden and Finland. For example, co-operation with Sweden on the Eastern Partnership and security policy has continued, while the two countries built a closer administrative co-operation within the framework of the “Declaration on political cooperation in the areas of strategic importance” from 2011. Interestingly, in spite of the political stalemate with Lithuania, economic relations have been historically the strongest for Poland – last year, exports increased by over 16%, and imports decreased by over 31%. Poland has also improved its trade balance with the other Baltic states.
Branding and communication of the BSR in Poland is a recent process. It came as a reaction to the process of creation, revision and implementation of the EUSBSR. Moreover, the BSR co-operation is of a meticulous, dispersed grass-root or administrative nature, and thus has difficulty being ‘medially catchy’. However, in order to better understand regional needs and problems, and to increase the region’s visibility in the politics of Poland, since 2011 the Polish MFA has been organising annual meetings of the Polish ambassadors to the BSR. These meetings take place in the Northern voivodeships, with the involvement of local administrations, Polish trade and cultural institutes in the region and representatives of science. It is also noteworthy, that since 2007, the capital of Warsaw has participated in the regional branding projects “Baltmet Promo” and “One BSR”.
Outlook
The relative stability of the Polish economy gives reason to expect continued interest in playing a greater role in the EU. Although the economic situation in Poland will depend on European developments, in the short term perspective, the country should benefit from its privileged position of stability, predictability and economic growth – a magnet for foreign investments and for bilateral co-operation.
In the 2020 perspective, the priority will be given for wise spending of EU funds. At the same time, the government should search for alternatives to infrastructure investments sources for growth and competitive advantage, strengthen the SME sector and continue the search for new export markets. The models for these solutions are already available in the BSR and Poland should include the aspect of the models of modernisation and sustainable development into the co-operation with Germany, Estonia and the Nordic countries. Joining the Eurozone will undoubtedly have a significant economic impact. At the same time, a definite governmental stance on it in the time of crisis, as a sign of Polish determination, should not to be discounted. In domestic policies, however, should the crisis continue, and the unemployment and migration rates rise, there is a risk that this will create ripe soil for populist slogans possibly attractive for the group of ‘indecisives’. The first litmus test for their preferences comes with the elections to the European Parliament in 2014.