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The Warsaw Voice » Business » September 30, 2011
Economic Forum in Krynica
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Focus on Future of Europe
September 30, 2011   
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More than 2,500 prominent businesspeople, politicians and financiers from 60 countries took part in the 21st Economic Forum in the Polish southern spa town of Krynica in September.

The Economic Forum in Krynica, organized for over 20 years by the Eastern Institute, has an established reputation as one of the most important meetings for European politicians, businesspeople, researchers and media people, especially those from Central and Eastern Europe. This year’s forum was held under the title European Dilemma: Partnership or Rivalry? The topic was meant as an invitation to discussion about the extent to which new EU member states, especially Poland and other Central and Eastern European countries, have become partners for the founding members of the EU in solving its most important problems.

“The European Union is a concept for difficult times. It was founded so that Europe would never again get into the trouble it had been in in the first half of the previous century,” Prime Minister Donald Tusk said at the opening session. “Today, we have other troubles to deal with and they show that we should stick to this idea instead of questioning its very foundations.” Tusk added that the EU was a good idea for those who were waiting to enter the euro zone. “Poland and other countries in the region have some hard data behind them, for example our GDP growth figure. We operate effectively at a time of financial crisis,” Tusk said.

“Thanks to Poland, we still believe in Europe. We are not cynical about integration,” said Georgian President Mikheil Saakashvili. “Poland shows us that radical reforms pay off. I always hold it up as an example of what the outcome of change may be. Polish entrepreneurs are the most open to new proposals in Europe. This is a skill we should learn from Poles.”

Moldovan Prime Minister Vladimir Filat said on his part that European solidarity could be strengthened by building roads, pipelines, infrastructure and technologies together. Filat encouraged those gathered to seek new suppliers and work on alternative energy sources.

Participants in several panel discussions held at the forum talked about what kind of solidarity Europe needs as it faces the danger of Greece going bankrupt and debt problems in other EU member states. “European solidarity should be reflected in concrete budgetary and structural measures,” said Mercedes Bresso, head of the EU Committee of the Regions. “We have to create a long-term financial framework and cohesion policy, and get rid of unhealthy competition among regions. Competition is important, but it should be based on cooperation. We need a big project to strengthen our communality because only by working together will we be able to restore Europe’s former strength.”

Grzegorz Schetyna, Speaker of the lower house of the Polish parliament, said Europe was not only a community, but also a firm and its leaders are responsible for protecting it against bankruptcy. He added that in this debate, politicians should speak less and listen more, especially to economists. Former Prime Minister Jan Krzysztof Bielecki said that, apart from solidarity, Europe also needed solidity. “One should not devote too much attention to discussions about mistakes made by bankrupts. One should get down to work,” Bielecki said. “Solidarity and solidity must go hand in hand.”

As usual, much space at the forum was devoted to energy security. “The first nuclear power plant is to be put into operation in Poland in 2023,” said Tomasz Zadroga, president of the PGE energy group. “By the end of this year, we will know its three potential locations. The actual one will be chosen at the end of 2012. The first unit will be built eight years later. And the whole project will be completed in 2023 or a year later.”

Deputy Treasury Minister Jan Bury argued that the macroeconomic effects of the project would be beneficial for the Polish economy as the country’s economic growth would accelerate and the gap between Poland and the most developed EU countries would narrow. On the other hand, in 2014-2016 Poland will have to modernize its power grid and build more connections to the European grid.

During the global crisis, Poland recorded the highest GDP growth among Central and Eastern European countries. And in 2004-2008, Poland was one of the countries which caught up significantly with the old EU—these are the most important conclusions of the PriceWaterhouseCoopers (PwC) report Competition, Cooperation, European Solidarity. Central and Eastern Europe 2004-2011 presented at the forum. The report sums up the seven years since Poland’s EU entry.

The authors of the report say that increased investment spending, especially foreign investment, and exports were the main factors behind economic growth in Central and Eastern European countries immediately after they entered the EU. As a result, countries located closer to Western Europe had a bigger chance for an improvement in their financial situation. Prof. Witold Or³owski, chief economic adviser at PwC, pointed to Poland, Slovakia and the Czech Republic as countries which managed to narrow the gap to Western Europe in terms of economic development. Regular transfers of money from EU funds were another factor supporting new member states. Without them, the financial crisis would have been much more painful for them. The crisis, which apart from Western European countries seriously affected new member states as well, came after four years of accelerated growth. “However, there was much variation in economic results across the central and eastern parts of the continent—from a dramatic drop in GDP in the Baltic states, Lithuania, Latvia and Estonia, to moderate growth in Poland and Belarus,” Or³owski said. “The differences are due to the situation of individual European countries just before the crisis—those which had imbalanced finances and growing debt had significantly more trouble in dealing with the crisis.”
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