The effects of the financial crisis on Poland

Poland
Foundation for European Studies - European Institute
 
In the beginning of November 2008, some economists and bankers asked the government for the preparation and implementation of the anti-crisis packet. Most banks ceased to give enterprises loans that resulted in hampering further investments. According to Central Statistical Office data, the production value in November 2008 decreased by 13 percent in reference to October 2008 and by 9 percent in reference to the corresponding period of 2007.
 
On 30 November 2008, the government introduced the packet The Stabilization and Development Plan. The Prime Minister, Donald Tusk, stressed that the most important issue was to provide financial stabilization and to take actions supporting economic growth.[1] The government’s plan has the value of over 91.3 billion PLN. Among main actions there were: the increase of guarantees for banks, creation of additional credit schemes for SMEs with the value of 20 billion PLN, and accelerating the investments financed with EU structural funds estimated at 16.8 billion PLN. The key point for the government was to sustain the planned level of budget deficit and to implement changes in laws, enabling more efficient actions of credit institutions. The Stabilization and Development Plan foresees to establish The Social Solidarity Reserve of 1.14 billion PLN, which is meant for parts of society most affected by the crisis. Simultaneously, the Minister of Finance, Jacek Rostowski, presented the latest estimate of Polish economic growth that in 2009 was reduced from 4.8 percent to 3.7 percent. He added that it is compulsory to reduce some budgetary expenses in order to sustain the deficit on an earlier estimated level.
 
The largest opposition party, Law and Justice, representatives presented a different attitude – Joachim Brudziński supported the Plan, Karol Karski estimated it as “the plan without any hard facts”.[2] In the beginning of December 2008, the leader of the party, Jaroslaw Kaczynski, criticized The Stabilization and Development Plan and added that Law and Justice is preparing its own vision of economic policy, plainly different form the governmental one. Such a packet would be indeed an anti-crisis one, but in its idea it should support rapid economic growth.[3]
 
Opinions of economists towards the governmental plan were divided. Krzysztof Rybinski – representative of “Ernst&Young” supported the idea of facilitating the access to EU structural funds and was opposed to the idea of creating the governmental guarantees for banks and the introduction of a 3-year tax allowance for firms. Both the former Minister of Finance and the former Minister of Economy – Mirosław Gronicki and Jerzy Hausner – backed up the guarantees for firms that reduce financial risk as well as acceleration of expenses from EU structural funds, and opposed the idea of guarantees for selected economic ventures as well as for export credits. Stefan Kawalec – former Minister of Finance – supported the idea of creating the credit program for SMEs and opposed to assign 5 billion PLN for guarantees for firms and the creation of some economic stimulus for emigrants in order to facilitate their return to Poland.[4] Jan Winiecki – Professor of Economics at the University of Information Technology and Management in Rzeszow commended the plan for its simplicity adapted to cyclical development of capitalistic economies. Marcin Peterlik, an expert at the “Institute for Market Economics”, also supported the plan and added that results of such actions might be seen in 2009.[5]
 
According to representatives of the “Polish Confederation of Private Employers Lewiatan”, The Stabilization and Development Plan presented by the government is a chance for the SME’s sector, but it is lacking a reduction of non-financial labour costs and simplifications in the fiscal policy system.[6] “The All-Poland Alliance of Trade Unions” (OPZZ) assessed the plan as insufficient. According to the alliance, in crisis the government should support all citizens, not only enterprises, and the Cabinet should not allow changing the labour law which is adequate to second the anti-crisis actions, especially on the level of employing institutions.[7]
 
The head of the “Polish Bank Association”, Krzysztof Pietraszkiewicz, claimed that the effects of the financial crisis may be greatly limited. In his opinion, more efficient cooperation between the National Bank of Poland and private banks is necessary. He added that loan and guarantee funds would be more significant, especially those that would provide additional financial resources for SMEs.[8]
 
According to a public opinion poll conducted by “TNS OBOP” in November 2008, 66 percent of the respondents do not claim to be directly affected by the financial crisis. 5 percent of households in Poland lost money due to the changes of shares value and in foreign currencies exchange rates, 16 percent were affected by the decrease of savings invested in pension funds, and 11 percent of respondents had to pay greater mortgage.[9] A Eurobarometer survey, that took place in the same period of time showed that 39 percent of Poles evaluate the current economic situation in Poland as “good” (8 percentage points less than one year ago), and 55 percent as “bad” (6 percent more than one year ago). Further deterioration of the economic situation is foreseen by 31 percent of Poles, and 20 percent of Poles expect improvement.[10]




[1] IAR Internetowa Agencja Radiowa [Internet Radio Agency], 30 November 2008, “PKB 3,7%, rezerwa solidarności społecznej – rząd przedstawił plan antykryzysowy” [GDP 3,7 percent, the Social Solidarity Reserve – government presented anti-crisis packet], available at: http://gospodarka.gazeta.pl/ (last access: 25 January 2009).


[2] PAP, Polish Press Agency, 30 November 2008, Karski: plan rządu bez konkretów [Government plan without hard facts], available at: http://www.pb.pl/ (last access: 25 January 2009).


[3] IAR, Internetowa Agencja Radiowa [Internet Radio Agency], 4 December 2008, J. Kaczyński krytycznie o rządowej walce z kryzysem [Jaroslaw Kaczynski criticizes government’s anti-crisis measures], available at: http://gospodarka.gazeta.pl/ (last access: 25 January 2009).


[4] Polski plan na kryzys, czyli eksperci sobie, rząd sobie, 28 November 2009 [Polish plan for crisis: government and experts – each going his own way], available at: http://www.media.egospodarka.pl (last access: 25 January 2009).


[5] IAR, Internetowa Agencja Radiowa [Internet Radio Agency], 30 November 2008, Kaźmierczak: Rząd próbuje walczyć z kryzysem, którego w Polsce de facto nie ma [Government attempt to fight crisis which is not existent in fact], available at: http://gospodarka.gazeta.pl/ (last access: 25 January 2009).


[6] IAR, Internetowa Agencja Radiowa [Internet Radio Agency], 4 December 2008, PKPP Lewiatan: “Plan Stabilności i Rozwoju” szansą dla MŚP [Stability and Development Plan: A chance for SMEs], available at: http://www.egospodarka.pl (last access: 25 January 2009).


[7] PAP, Polish Press Agency, 29 December 2008, OPZZ: w działaniach antykryzysowych uwzględnić interesy pracownicze [Anti-crisis measures should take in account labour interests], available at: http://praca.gazetaprawna.pl (last access: 25 January 2009).


[8] IAR, Internetowa Agencja Radiowa [Internet Radio Agency], 19 December 2008, Skutki kryzysu można ograniczyć [Cost of crisis can be brought down], available at: http://gospodarka.gazeta.pl/ (last access: 25 January 2009).


[9] PAP, Polish Press Agency, 26 November 2008, TNS OBOP: dwie trzecie badanych nie czuje się dotknięta kryzysem [Two thirds of respondents affected by crisis], available at: http://www.gazetaprawna.pl/ (last access: 25 January 2009).


[10] PAP, Polish Press Agency, 18 December 2008, Eurobarometer: Na tle UE Polacy optymistycznie oceniają gospodarkę [Vis-à-vis EU Poles optimistically assess the economy], available at: http://gospodarka.gazeta.pl/ (last access: 25 January 2009).