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The Warsaw Voice » Business » October 28, 2009
Business
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EU Funds Boost Economy
October 28, 2009   
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Poland's Danuta Hübner, chairwoman of the European Parliament's Committee on Regional Development, talks to Andrzej Ratajczyk.

This year marks five years since Poland joined the European Union. What are the biggest benefits of belonging to the European club?
Poland has a significantly stronger political and geographical position in the world today by virtue of its membership of the European Union, which presently bands 27 countries together. Poland has particularly obtained a lot in economic terms. Modernizing the Polish economy has gathered momentum over the last five years. This is partly due to financial support under the European Union Cohesion Policy. This additional injection of funds has not only let us fast-track infrastructure investment; it has also enabled us to support the small-to-medium business sector and improve the competitiveness of the economy as a whole.

One of the benefits of joining the European Union is the common market. This enables a faster rate of economic growth, as well as a revival of Polish exports, and is an incentive to modernize businesses.

But I'm convinced that the greatest benefit of accession is Poland's return, in the broad sense of the term, to Europe, with its freedom to travel, open labor markets and the ability to study at foreign colleges. This opening up of Poland to the rest of Europe, and from there to the rest of the world, is the most important thing, especially for the younger generation of Poles.

In the last few years, you were responsible for regional policy in your capacity as an EU commissioner. How does policy formulated in Brussels influence Polish society and the Polish economy?
Poland is the biggest Regional Policy beneficiary of all the 27 member states because a fifth of the EU's financial support under its Cohesion Policy finds its way here. Poland will have received more than 67 billion euros between 2007 and 2013 by this method. These are enormous investment resources which, when supplemented with funds from the Polish budget, will serve Polish economic and infrastructure development and the development of small and medium-sized businesses-especially the innovative ones.

I think that the EU's Regional Policy gives Poland a golden opportunity to move forward, especially when it comes to upgrading infrastructure. Because what investor is going to want to invest in Poland unless there are good roads and good rail, air and telecommunications connections here?

How is Poland making use of this opportunity? Is the level of absorption of EU funds satisfactory?
In my opinion, Poland, like the rest of the new European Union members, is making very efficient use of these funds. Not a single euro has slipped through so far. The funds that were earmarked for Poland between 2004 and 2006, and which had to be spent until June this year, have been completely used up. And now we're in the process of absorbing the second installment of funding, the 67 billion euros already mentioned. In terms of utilizing European funding, Poland is currently in eighth place in the entire union. I think this is a decent position, although I'm aware that things can always be done faster and more efficiently. Obviously, this is not just about using up all the funds but rather investing them wisely. This is why good programs and development strategies, both at the regional and sector levels, are so important.

Can European funding be a factor in increasing economic prosperity in Poland in these days of global financial crisis?
I am convinced that investment using European funding was one of the factors that made Poland the only country in the European Union to post economic growth for the first half of the year. These funds will play a significant role in stimulating the economy over the coming months as well.

As the European Commissioner for Regional Policy, I initiated a process this year to simplify this policy to make it easier for businesses to receive European funding in difficult times. The crisis has led both the European Parliament and the member states to support the initiative to simplify the way in which European regional policy operates. A great deal of streamlining has already been put in place. We have also transferred additional advance payments from the Structural Fund. As an example, Poland has received an extra 900 million euros in Structural Fund advances this year. In all, Poland has received 6 billion euros from this source last year and this year.

During a crisis, it is vital that investment accords with European Regional Policy priorities, such as restructuring the economy, increasing energy efficiency, reducing resource consumption, innovation and, of course, infrastructure, which requires a thorough overhaul. In the end, this leads to an increase in the competitiveness of the Polish economy. It follows from this that regional policy is a good policy in a time of crisis.

Poland is the only country in the European Union recording economic growth. Do these good macroeconomic results enhance Poland's economic position within Europe? Is there a chance for Warsaw to become the financial hub of Central and Eastern Europe?
The opportunity is obviously there. Poland's strength is that is has been affected by the financial crisis to a far lesser extent than other countries. This is the result of a certain prudence on the part of the institutions that determine the nature of the financial market and of the building up and strengthening of financial institutions step by step so that they can withstand the phenomena that brought about the financial crisis. Poland is a country investors can have confidence in.

Apart from that, Poland has shown that, in real terms, it can get through a crisis at a lesser cost than every other economy in Europe. The Polish economy seems to be doing especially well compared with the economies of those countries that joined the European Union at the same time. To take one example, Slovakia was one of the most rapidly growing economies in Europe not so long ago. Today it has recorded a 6 percent drop in GDP. Lithuania looks even worse, having had its economy shrink by 20 percent.

It may not be much, but Polish economic growth is partly the outcome of an responsible economic policy, thanks to which investors have been able to maintain confidence in Poland. And building confidence among investors is essential if Warsaw is to be thought of as a potential financial hub for the region.
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