COVID-19 Be Damned: How Poland Is Beating Another Crisis
Compared to other EU member states, Poland was barely affected by the international financial crisis or the refugee crisis of 2015. Now, the country could emerge from the coronavirus pandemic in a stronger position than before.
WARSAW —There were ten Polish flags fluttering in the background but no sign of European stars when Polish president Andrzej Duda and Prime Minister Mateusz Morawiecki laid out the positive results of a Europe-wide investment program. The red-and-white flags showed that they considered it their achievement— a Polish achievement. "We wouldn't have had such success," said Morawiecki, "if we'd continued to rest on our laurels."
According to President of the European Commission Ursula von der Leyen, 750 billion euros will be pumped into Europe's economies to guard against the danger of a post-coronavirus economic crisis. Poland is set to be one of the main beneficiaries, receiving 63 billion euros. Only Italy and Spain, which have been hit particularly hard by Covid-19, are due to receive more.
Poland is in a relatively good economic position as it was able to successfully slow the spread of the virus. Its infection rate is lower than almost any other major EU country. There have been 22,825 confirmed cases in Poland, making the infection rate 11 times lower than in Spain. It is one of many examples where Poland has proven itself able to weather any storm. Since joining the EU in 2004, the country has come through all major European crises unscathed: the euro crisis in 2009, the refugee crisis in 2015 and now the coronavirus crisis.
Again and again, Warsaw has stood firm while others have stumbled. Through a combination of tactical skill and a great deal of luck, Poland has made itself an attractive prospect for foreign investment. On average it receives 6 billion euros of direct investment every year. Its peripheral position and isolationist policies during the refugee crisis allowed Warsaw to paint the country as untouched by the crisis. It's not clear how Poland's immigration policies will look in the future, but its economy is quickly catching up with its European competitors and looks set to gain on them even further after the coronavirus pandemic.
"Poland's economy will grow and it will take its place on the top rung of the EU. It's possible that our economy will soon overtake Spain," said Marek Belka in an interview with Die Welt. The MEP, who belongs to the Progressive Alliance of Socialists and Democrats, was prime minister of Poland until 2005 and head of Poland's National Bank between 2010 and 2016. He was therefore partly responsible for ensuring Poland survived the aftershocks of the euro crisis unscathed; It was the only EU member state that continued to grow during the crisis years, by 5.1% in 2008 and 1.6% the following year.
Again and again, Warsaw has stood firm while others have stumbled.
"At that time, as it does now, Poland had a strong banking system," says Belka, "mainly because of the reforms introduced by previous governments before the Law and Justice Party came to power." He argues that Poland is both stable and unstable at the same time, as the Law and Justice Party has an ongoing conflict with the EU and is deepening divisions within Polish society. Although the Party has built up Poland's economy, citizens are split when it comes to its policies: Its controversial, so-called justice reform and its disregard for constitutional standards are a stumbling block that prevents Warsaw from collaborating effectively with the EU. This is worth bearing in mind when we think about how Poland has overcome successive crises.
Despite the disagreements with Brussels, Poland now benefits enormously from EU membership, just as it did after the financial crisis. At that time, it boosted its economy through subsidies and its domestic financial sector's relatively low involvement with international markets protected it from the worst of the crisis.
"At that time, Poland didn't have to deal with problems in the property market as other European countries did. 2009 actually saw a rise in the number of properties being sold," explains Adam Czerniak, an economist from Warsaw-based consulting firm Polityka Insight. He says that Poland is in a strong position "because our market is large and we have a self-sufficient economy." Czerniak also points to the high levels of spending and a diverse export economy, as well as significant investments; US tech giant Microsoft recently announced a billion-dollar digital transformation plan in Poland, sealing the largest tech investment in the country's history.
Prime Minister Mateusz Morawiecki at a press conference at the Chancellery in Warsaw, Poland.—Photo: Jaap Arriens
Poland doesn't have strong international connections, which has actually proven to be an advantage during the coronavirus pandemic. Before the crisis, the country's largest airport — Warsaw Chopin Airport – welcomed 15 million passengers. In Frankfurt the number was more than 70 million. Poland's lack of connections to other parts of the world meant that the virus became problematic much later than in other EU countries. The first confirmed cases of Covid-19 were reported in West Poland in March of this year, when Italian hospitals were already full to overflowing. Having already seen what other countries were experiencing, the Polish government reacted with strict policies designed to contain the virus.
In 2009, the effects of the property and financial crash reached Poland later than other countries and the same was true of this year's virus. In 2015, the Law and Justice Party resisted introducing measures that would make all European countries take a proportional share of refugees. It was a politically motivated decision, but Poland's position on the edge of the EU also means that hardly any refugees from the Near East tried to reach the country. Deepening divisions within society and attacks on asylum centers... Poland could avoid all that if it showed a little solidarity.
"It's not about solidarity. When other countries want to push their own interests, or criticize Poland, then foreign commentators like to use pretty words. But where is the solidarity with Poland when it comes to Nord Stream 2?" asks Dominik Tarczynski, an MEP who is the Law and Justice Party's spokesman on asylum policy, referring to a Russia-to-Europe pipeline that, if built, will effect Poland. He won't allow the decision of taking on refugees to be framed as an act of solidarity. He says that he is not a racist: "We have nothing against migrants. Millions of Ukrainians have immigrated to Poland legally. They contribute to the economy and obey our laws." Tarczynski is not a right-wing outlier in his party; he's expressing the party line. He says immigrants from the Ukraine are welcome in Poland. Since the Crimea conflict began, almost two million Ukrainians have immigrated to Poland. They have contributed significantly to the country's economic growth, working across all sectors – another way that Poland's peripheral position in Europe has proven to be an advantage.
If, as many are predicting, Western Europe and the United States become less dependent on China as they emerge from the coronavirus pandemic, Poland could be one of the first countries to benefit when supply chains begin to shift. President Duda has already alluded to this. When he announced the economic recovery measures, he said that Europe could once again become a manufacturing center. A scenario in which his country is poised to play a decisive role.