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The Warsaw Voice » Business » May 31, 2012
Business & Economy
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Greek Problems Could Hit Poland
May 31, 2012   
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Until recently, it seemed that June would be the month when the whole of Europe would be interested in little besides the Euro 2012 soccer tournament hosted by Poland and Ukraine.

But, in business circles at least, problems in Greece may draw even more attention than soccer. Economists say that Greece’s exit from the eurozone, which is becoming increasingly likely, could trigger an international chain reaction. Greece’s role in the European Union’s economy is very small, slightly exceeding 2 percent of the EU’s GDP. But the problem is that if Greece exits the euro, huge support will be needed for other countries which already have serious problems because of their high deficit and debt. These countries are Spain, Portugal, Ireland and Italy. They will need financial assistance to convince the markets that they are not like Greece.

Although Poland is not a eurozone member, the problems of Greece and the other countries could have an adverse impact on its economy as well. The eurozone crisis would contribute to the high volatility of the Polish currency, drops on the Warsaw Stock Exchange and a fall in foreign investment. The fact that many international financial institutions are praising the Polish economy would be of little help. Poland has the strongest economy of all Central and Eastern European countries, according to a recent analysis by Bank Sarasin & Co. of Switzerland, because of the favorable situation of its labor market and of its public finances. The bank’s analysts say that the Polish zloty—along with Asian currencies, the Swedish crown and the Canadian dollar—is now one of the world’s strongest currencies.

Polish entrepreneurs are also optimistic about the country’s economic situation. GE Capital says in the Barometer of Investment by Small and Medium Businesses in Europe report drawn up in conjunction with BPH Bank that in the next 12 months Polish small and medium-sized businesses plan to invest 35.3 billion euros, 34 percent more than a year earlier. What’s more, the Polish small business sector will spend more than its counterparts on other European markets.
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