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The Warsaw Voice » Other » December 2, 2009
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Ambitious Plans Debated
December 2, 2009 By A.R.    
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Thanks to Poland's growing economy, Warsaw stands a chance of becoming a financial hub in Central and Eastern Europe in the near future, said participants in the international Warsaw-CEE Financial Hub conference that was held in the Warsaw Stock Exchange (WSE) Nov. 26-27.

Warsaw is considered to be one of the most attractive business locations in Europe and the WSE is in many respects the largest stock market in the region. Poland's capital city may soon become the most important financial center in this part of Europe, said conference participants, who discussed Warsaw's chances to become a regional financial center.

The conference was organized by The Warsaw Voice in association with the International Herald Tribune, the WSE and municipal authorities. Taking part in the conference were government and municipal officials, experts on finance and investors, in addition to securities issuers.

Warsaw is Poland's business capital and one of the largest and most important urban centers in Central and Eastern Europe, conference participants said. One in four new Polish businesses is launched in Warsaw and 30 percent of the foreign-owned companies active in Poland have chosen the city as their headquarters.

"The latest European Cities Monitor report by Cushman & Wakefield confirms Warsaw's attractiveness, putting the Polish capital in 23rd place among European cities in terms of business friendliness," said Jarosław Kochaniak, deputy mayor of Warsaw. "The survey also showed that Warsaw is the place where the largest number of Western European businesses want to set up shop in the next five years."

Foreign investors would be less interested in Warsaw if the Polish economy were not coping with the crisis so well, conference participants said.

"Poland will be the only European Union country to avoid recession and it will also be the OECD country with the highest economic growth in 2009," said Finance Minister Jacek Rostowski at the conference. According to Rostowski, Poland is doing better than other economies thanks to the flexibility and efficiency of local businesses and consumers, in addition to well-judged government policies.

Sławomir Majman, president of the Polish Information and Foreign Investment Agency, said, "I have no doubts that Poland has recently become even more attractive to foreign investors. This is proven by the fact that, for the first time in three years, Poland has improved its ratings in terms of the investment climate."

Leszek Balcerowicz, the former deputy prime minister, finance minister and central bank chief, said that, while being happy about the strength of the Polish economy, one should not forget that this success story may prove to be short-lived unless further reforms are carried out.

"The greatest problem is the poor state of public finances caused by extensive public spending, especially welfare expenditure, because much of the money is not going to those who really need it," Balcerowicz said. He added that a public finance reform was the most needed.

Balcerowicz criticized measures recently taken by various countries to stimulate economic growth. Economist Witold Orłowski voiced a similar view. "We must not let ourselves be lulled into a belief that we no longer need to reform the economy," Orłowski said.

The Warsaw Stock Exchange stands out among other European bourses and would be the core of the prospective financial hub, according to conference participants.

"According to the most recent data, we are number one in Central and Eastern Europe in terms of the number of companies listed, capitalization and turnover," said Ludwik Sobolewski, president of the WSE . "One can say today that the WSE is not only the largest stock exchange in the region, but also the most innovative one. Moreover, after the recent series of projects such as NewConnect and Catalyst, we are the most complete market."

Iwona Sroka, head of the National Depository for Securities, said, "Poland's economic potential contributes to the development of the country's financial market and vice versa." According to Sroka, a regional financial hub cannot be built in Warsaw without cooperation from all market players.

Wiesław Rozłucki of the Polish Institute of Directors, who was the first president of the WSE, said that WSE managers are doing much to strengthen the position of the Warsaw exchange in the region, but only joint efforts can lead to real success.

"Large-scale measures should be taken as soon as possible to promote Warsaw as a regional financial hub," Rozłucki said.

Polish financial market players are pinning a lot of hope on the government's new privatization plan for Treasury-owned companies.

"Under the government's plan, large companies in sectors such as energy and financial services will be sold via the stock exchange," said Deputy Treasury Minister Adam Leszkiewicz.

Other factors contributing to Poland's upbeat economic performance include the region's highest volume of structural funds and preparations for the Euro 2012 soccer championships to be held in Poland and Ukraine, the two largest countries in the region.

Projects related to Euro 2012 are expected to spur Poland's economy. Alongside the construction of new sports venues, Euro 2012 involves huge investment in infrastructure, roads, airports and hotels, experts say. Many of these projects will be carried out in Warsaw.

"Some projects would have to be carried out regardless of Euro 2012," said Olgierd Dziekoński, the deputy minister of infrastructure.

Marcin Herra, chairman of the PL.2012 company, tasked with coordinating Poland's preparations for the event, said, "The event will definitely help speed up many projects. Euro 2012 involves substantial investment totaling around 20 billion euros."

Not all championships-related projects are free from problems. Some are encountering financial obstacles along the way. Anna Nietyksza, president of Eficom SA, said, "My observations indicate that there are considerable delays in obtaining EU funds for some projects. The delays are caused by lingering procedures related to factors such as feasibility studies and public procurement regulations."

According to Danuta Hübner, chair of the European Parliament's committee on regional development, Poland is facing the double challenge of maintaining its current economic growth rate and "leaping" over consecutive development phases. "Poland should put a greater focus on innovation," Hübner said, for example by investing in the IT sector, which offers many development opportunities for the country.

Roman Durka, president of Fujitsu Technology Solutions, echoed, "Polish companies should search for niches on the IT market so that they can successfully compete internationally. Software seems to be the field in which we stand a big chance to succeed."

According to Hübner, EU funds are a sign of European solidarity and play a major role in ensuring equal development opportunities. "Although the crisis has impaired international solidarity, in Europe solidarity remains a defining feature," Hübner said. "Solving global problems, however, takes global solidarity."
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