The furore over allegations that Lech Walesa collaborated with Poland’s communist secret police in the 1970s shows that the past is ever present in the countries that once made up the Soviet bloc. Intelligence files, real or fabricated, have often been used to destroy political opponents or settle scores, while laws on lustration and ‘de-communisation’ have played an important role in the efforts of central and eastern European states to define their post-communist identities. Vladimir Putin has also been an active participant in these ‘history wars’, rehabilitating the symbols and personalities of the Soviet period to encourage patriotic sentiment at home and labelling countries that try to erase their Soviet legacies as inherently Russophobic.
Divergent attitudes to the past are likely to remain a potential flashpoint in relations with Russia, yet it is no longer clear that the efforts many of these countries devote to repudiating the communist era serve any useful purpose in promoting or consolidating political change. Most of them completed their democratic transitions years ago and the danger of a communist revival is now wholly non-existent. If there is an internal threat to the open, pluralistic, market-oriented societies that successfully emerged from the wreckage of the Soviet experiment, it comes from a different direction altogether. In particular, it comes from a populist, authoritarian right that wants to build an illiberal Europe of closed borders and closed minds. Read more
Those who relish irony will have found much to savour in the Swiss central bank’s actions on Thursday when, as Mohamed El-Erian comments, we were reminded of the dangers of substituting financial engineering for real economic reform.
The choicest item is the way that Hungary’s authorities have emerged, as analysts at Commerzbank put in on Friday morning, looking like “financial experts of the highest calibre” – not an opinion often heard on financial markets. Read more
This is what happened to the Hungarian forint and the Polish zloty, measured against the euro, after the Swiss central bank abandoned its currency peg on Thursday.
Source: Thomson Reuters
By Marcin Piatkowski and Natasha Kapil, World Bank
Poland is Europe’s growth champion. It has more than doubled its GDP per capita since the beginning of the post-socialist transition in 1989, consistently growing since 1992, and was the only EU economy to avoid a recession in 2009. Poland is a prime example of the success of the European “convergence machine”.
In 2014, the level of income adjusted for purchasing parity exceeded $24,000 and reached almost 65 per cent of the level of income in the euro zone, the highest absolute and relative level since 1500 A.D. Read more
Scandal? What scandal?
Despite the intrigue of wiretapped phone calls and behind-the-scenes skulduggery enveloping Poland’s political elite, investors appear unruffled.
The cost of government borrowing today fell to its lowest level since May 2013, suggesting that investors think the country’s economy can ride out the storm. Read more
Central and Eastern European local currency bonds lifted following a widely-anticipated move by the European Central Bank to cut key interest rates in a bid to anchor the eurozone’s tentative economic recovery.
The confirmation of cheaper money across the continent sent investors searching for riskier assets, further pushing down yields on Turkish, Hungarian and Polish bonds which have rallied over the last month. Read more
By Marcin Piatkowski of the World Bank
Today, Poland is celebrating the 25th anniversary of elections that ushered in a new Solidarity-led government, the first democratic government behind the Iron Curtain.
In 1989, the newly democratic Poland faced unprecedented economic challenges. Despite attempts at reforms, the country was bankrupt, inflation was rampant and industry outdated and inefficient, exporting less than $10bn worth of steel, coal and ships. Agriculture employed a quarter of the workforce. Despite the general enthusiasm, many feared economic disaster.
A quarter of a century later, Poland is the most successful economy in Europe. Read more
Manufacturing in central Europe’s leading economies continued to grow in May, with PMIs in Poland, Hungary and the Czech Republic indicating continued expansion, although Poland appeared to show some impact from declining exports to Russia and Ukraine due to the fraught political situation in those two countries. Read more
As the European Central Bank (ECB) teases investors with hints of monetary stimulus measures, expectations of a rate cut are already helping boost appetite for emerging market debt on the continent.
Yields on Hungarian forint bonds dropped yesterday following a heavily oversubscribed bond auction, and since the start of the month Polish and Romanian local currency bonds have also rallied. Read more
Not everything in life is always completely and irredeemably bad, even if you happen to be running an emerging economy. In the case of currency devaluations handed to the big emerging markets over the past year, however, the silver lining has not made up for the cloud.
It was a year ago this week that the “taper tantrum” shook emerging markets, after comments from then Fed chairman Ben Bernanke raised fears of the US central bank tightening monetary policy. Exchange rates dropped sharply in the fragile fraternity of emerging markets with flexible currencies – Brazil, India, Indonesia, South Africa and Turkey. However, bad though the turbulence was – and the panic returned for a short while earlier this year – the currency movements should at least have had the benefit of handing those economies’ exports a competitive advantage through a lower exchange rate.
Amid the encircling gloom, a boost for the Polish economy on Tuesday: Volkswagen is to spend around 3.4bn zlotys ($1.1bn) to build a factory at Września in Poland’s Wielkopolska province. It will make VW’s Crafter delivery vans, currently built under contract by Daimler at two German factories, from the end of 2016. “Volkswagen has trusted the Poles once again,” said Janusz Piechociński, deputy prime minister. Read more
Nothing like a foreign policy crisis to concentrate the mind.
Poland’s potential adoption of the euro, which had been pushed off to the end of the decade under political, economic and constitutional difficulties and lacklustre public support, has been given a jolt of energy by Russia’s creeping invasion of Crimea. Read more
Rumours have been rife in Vilnius for months that PKO BP, Poland’s state-owned bank, the country’s biggest, is preparing an entry into Lithuania’s banking sector.
Should we take the rumours seriously? Read more
Central Europe’s leading economies have strapped on afterburners, with new manufacturing PMI data released Monday showing a strong recovery in Poland, the Czech Republic and Hungary.
In Poland, the region’s largest economy, the improvement in business conditions was the strongest in three years. The headline PMI number, in which anything above 50 marks an economic expansion, came in at 55.4 for January, up from 53.2 in December. Read more
Poland’s economy turned in an unexpectedly strong performance last year, growing by 1.6 per cent according to data released Thursday, but that did not stop the zloty from losing strength against the dollar and euro amid continued emerging market worries.
The economy’s expansion surprised on the upside – most analysts had pencilled in only about 1.5 per cent growth. The final result for the year was also significantly higher than had been expected just a few months ago, when first quarter growth slowed to only an annual 0.5 per cent. Read more
Amazon’s Christmas season was marked by labour unrest at its German warehouses, and as the US retail giant expands into central Europe, building five centres in Poland and the Czech Republic, it is hoping that unions do not follow.
“In terms of unions themselves, we don’t see a need for that,” Tim Collins, director for Amazon´s EU logistics operations, told beyondbrics. “Any friction that gets between us and our associates slows down innovation, slows down change, slows down improvements on the shop floor, and we don’t see that as being good at all.”
However, the Solidarity labour union, heir to the organisation that helped end communism in Poland, plans to support any unionisation drive among Amazon’s Polish workers. Read more
Real estate can be an alluring post-crisis investment. Just ask punters who poured money into the US market a couple of years ago, or those now sniffing around Spanish property. The same applies to central European real estate, which last year saw a 31 per cent increase in investments, to €10bn.
That makes 2013 the second busiest year for transactions since pre-crisis 2008. Read more
By Kinga Dudzińska and Anna Maria Dyner of PISM
To the west, relations between Poland and Russia are often perceived as negative, mainly due to their history. However, one evident success of their bilateral cooperation in small border traffic (SBT) between northern Poland and Kaliningrad Oblast, with almost a year and a half of evidence showing it’s working well. Read more
It’s not often that banking regulators are on the receiving end of praise. More often than not they’re only noticed after something goes badly wrong. But Poland’s regulator has got a lot right in its approach to foreign exchange mortgages – allowing Polish borrowers to deal rather better with forex loans than their near neighbours in Hungary. Read more
Poland’s central bank has already indicated that there is not much chance of it increasing record-low interest rates before mid-2014, and Friday’s unexpectedly low inflation readout will do little to change that assessment. Read more