Economic Forum: New Ideas for Hard Times
September 28, 2012
Nearly 3,000 politicians, financiers, businessmen, academics and media leaders from around the world flocked to this year’s annual Economic Forum in the southern Polish resort of Krynica in early September to discuss the future of Europe and the world.
Organized by the Institute of Eastern Studies, the Krynica Economic Forum has an established reputation as one of the most important economic events in Central and Eastern Europe. The Krynica meeting regularly attracts those who want to talk about the future of the region and beyond, and those who want to share their experience and ponder ways of building a safe Europe based on solidarity, and of making Europe the most competitive economic area in the world.
This year’s 22nd Economic Forum was held under the motto New Visions for Hard Times: Europe and the World Confronting the Crisis. The central theme of the event referred to recurring questions about the best economic model for the world at a time of financial and economic crisis and about the principles and objectives of joint efforts of societies in the face of the financial crisis.
“The financial crisis has awakened many Europeans from a luxurious nap, showing that affluence and a high standard of living cannot be taken for granted,” Poland’s President Bronisław Komorowski said at the opening session of this year’s forum. “However, the European Union, though largely afflicted by the economic crisis, is still an attractive project...”
According to Komorowski, reform measures are needed today to counter the crisis, but at the same time it is necessary to muster solidarity and keep in mind the goals underlying European integration. “This is a job for us, politicians, a task for us, for Europeans,” Komorowski said. “[Coming up with] an idea for these hard times is the most important test of our commitment to this unprecedented political project which concerns Europe and European integration.”
Time for a rethink?
The president of Croatia, Ivo Josipovic, who took part in the opening session, agreed that it is necessary to look for a new vision for Europe. “It seems that the crisis with which we are confronted in Europe and elsewhere is not merely economic or political, but is a crisis of strategy, vision and leadership,” said Josipovic. “We need a fair Europe that will not be in the hands of political, economic, financial or any other elites. Europe does not belong to politicians. Europe must become a safe home for its citizens. New thinking, and perhaps also a new vision, are needed. We should not limit ourselves to the old models. We must also demonstrate inventiveness in the world of politics.”
Conference participants also discussed the future of the single European currency. They noted that the eurozone was a political project created at a time of growth. The current crisis raises the question about whether a united Europe and the common economy are a reasonable project, they said.
The current problems of the eurozone countries raise the question of whether the project involving the establishment of the euro had any chance of success, and of what can be done to fix the situation, said Armand Clesse, director of the Luxembourg Institute for European and International Studies.
The European Parliament’s Helmut Werner said that the euro is a more stable currency than the Deutschemark ever was, even though the latter was seen as a very strong currency. In reality there is no such thing as the crisis of the euro; rather we are dealing with a debt crisis that must be resolved, he added.
In turn, Heiner Flassbeck, director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD), said that Europe needs to get out of the recession as soon as possible. Without a return to a growth path, the situation threatens to bring about a political crisis with unpredictable consequences. When the unemployment rate rises, people will get even more frustrated, said Flassbeck.
Shale gas hopes
As usual, energy and the fuel sector were an important topic of the Krynica debates. This year, special attention was paid to opportunities related to the future use of Poland’s shale gas deposits. During the forum, fuel company PKN Orlen and the Center for Social and Economic Research (CASE) presented a report on the future of shale gas until 2025. The report contains three options for the development of the situation, depending on the demand for gas and the scope of investment in the energy sector. Under the most optimistic and most spectacular option, Poland will be able to produce 15 billion cubic meters of gas in 2020. If such a development strategy materializes, the government will earn zl.87 billion in taxes every year from 2020 onward, the report says. In addition, as a result of the development of the energy sector, 510,000 new jobs will be created, according to the report.
Prof. Piotr Moncarz from Stanford University called for a realistic approach to the benefits of the potential extraction of gas in the future. He said that in order to start a real race for shale gas, it is necessary to take real steps—starting out by straightening out regulations in Poland governing the extraction and sale of gas.
Another important highlight of this year’s Economic Forum was the signing of a letter of intent by four Polish companies—Enea, KGHM Polska Miedź, Polska Grupa Energetyczna, and Tauron—to work together in the construction of Poland’s first nuclear power plant. “This agreement is bound to get a lot of attention not only in Poland but also abroad—in all those countries from which our foreign partners come from. This is an important signal that practically all energy market players in Poland are involved in this project,” said Aleksander Grad, president of PGE Energia Jądrowa and PGE EJ 1, companies responsible for Poland’s nuclear energy program and for the preparation and construction of the country’s first nuclear power plant.
Krzysztof Kilian, president of Polska Grupa Energetyczna, said the agreement marks a “watershed moment for the Polish nuclear energy sector due to the fact that Poland’s largest companies have decided to work together in a project of key importance for the country.”