Newspaper article International Herald Tribune

Old Foes' Prosperous Friendship ; Polish Economy Benefits through Good Relations and Trade with Germany

Newspaper article International Herald Tribune

Old Foes' Prosperous Friendship ; Polish Economy Benefits through Good Relations and Trade with Germany

Article excerpt

Poznan, which over the past centuries, has violently traded hands between Germany and Poland numerous times, is the chief beneficiary of the improved relations between the two countries.

To understand how Poland outpaced its peers to become a glimmer of hope on a continent consumed with gloom, it helps to drive to this city on what was once the rutted, potholed road between Berlin and Warsaw.

A smooth freeway was completed just last month and is still so new that some stretches confuse GPS devices unaware of their existence; many rest-stop gas stations along the way are merely shells without finished access roads.

Poznan, which sits between the two capitals and, over the past centuries, has violently traded hands between Germany and Poland numerous times, is the chief beneficiary of the dramatically improved relations between the two countries. An open border has facilitated trade while European Union rules have encouraged investment, fulfilling the promise of membership before the bloc became absorbed with its sovereign debt crisis.

A rainbow of shiny new buses awaiting road tests at the headquarters of Solaris Bus and Coach in Bolechowo, just outside the city, tells the tale of export success. White and hot pink buses are bound for Monchengladbach in Germany, blue and white for Vasteras, Sweden, yellow for Aarhus, Denmark.

Foreign corporations including Volkswagen, Bridgestone and GlaxoSmithKline have operations in or around Poznan, a city of more than half a million. According to the Poland's government statistical office, in May 2012 Poznan was tied with Warsaw for the lowest unemployment rate in the country at 4 percent.

Yet Poznan also illustrates the threats posed to Poland's success story, not to speak of Europe's weaker economies. The kind of European Union infrastructure money that helped build the highway is being phased out. Empty state coffers in stricken countries, twinned with an emphasis on austerity rather than stimulus spending, threaten to crimp Poland's growth as well.

"In 2008, 2009, we never felt the financial crisis," said Malgorzata Olszewska, director of global sales and marketing at Solaris. After a record year for the company in 2011, with over $450 million in revenues, sales have slackened as Greece, Spain and Portugal have more or less stopped buying and Italy has become much more cautious.

"That's three markets that have completely fallen away," Ms. Olszewska said. "We're not pessimistic exactly, but more careful."

Poles have good reason to hope they can defy the odds again. Poland's economy was the only one that did not shrink in 2009, the year the financial crisis hit hardest. While nowhere near the 6.8 percent clip Poland achieved in 2007, growth is forecast at 2.7 percent this year, the fastest in the bloc.

Since the just-completed European soccer championship, which Poland co-hosted with Ukraine, many Poles have taken stock of their nation's progress and an unusual good mood has captured an often pessimistic country. "It offered proof that we had changed," said Bazyli Glowacki, 36, outside the deluxe Stary Browar shopping mall, named after the former brewery it is housed in. "You have nicer stores. People are better dressed. The theaters have better plays on."

Another Poznan resident, Stanislaw Skrzypczak, cited an old Polish expression for unexpected success to describe the recent improvements. "Poland caught God by the legs," he said.

It was not just a lucky catch, however, but one that was underpinned by sound decisions in Warsaw. Andre Sapir, a senior fellow and economist at the think tank Bruegel who specializes in European integration, said that Poland's success was a result of good management of both monetary and fiscal policy, keeping its debts low and its exchange rate flexible. …

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