Instead of tough fiscal policies - a radical reduction in costs and tight fiscal discipline. It is a strategy to address the crisis elected Polish Government. The team of Donald Tusk has set a rather ambitious goal: to use the crisis for reform of public finances, and as soon as possible to enter the eurozone. Such a strategy, as Finance Minister Jacek expects Rostovsky positively perceive investors who would rather associate Poland with a stable Slovakia than the crisis in Central Europe such as Hungary, Latvia, or Ukraine.
But the Poles did not manage to express my admiration for the success of Slovakia, at the first stage of the crisis has remained remarkable stability, as between the Danube and the Tatras, has started a real recession. One of the reasons - too strengthened the exchange rate for the Euro crown. The result? In Slovakia for a lot of strong euro in your pocket, but compared with the neighbors here has become too expensive to buy, rest, and produce.
However, Slovak
recession to the projected 6.2% decline in GDP on the basis of the current year is not merely a crisis nature. This - rather, after adjustment imbalance caused by the overvalued exchange rate. In any case, comparing the situation in Poland and Slovakia is very instructive.
Banking and currency concerns
Against the backdrop of other countries in Central and Eastern Europe, Poland may be an island of stability. When the neighbors most affected by a severe recession, economic growth in Poland has stabilized at around 0.5% of GDP, which can be considered a success. Besides, the Polish economy based on healthy soil. Previous governments had to implement a reform of fiscal system, although it occurred gradually and imperceptibly.
Back in December, Premier urged that there was no crisis of Poland does not deal with, so to speak of any crisis measures, there is no reason. Nevertheless, life has made his adjustments. Yes, the macroeconomic situation in the country is not so bad, but many businesses and individuals are faced with serious problems.
world crisis on their own skin felt, above all, young couples from the larger cities, took credit for housing. During 2004-2007, housing prices in urban areas grew to several dozen or more percent annually, and analysts predicted that this trend will be long, given Poland's accession to the EU and the massive buyout of real estate by residents of other countries, including Britain, Ireland, Netherlands and Germany.
man who in 2004 bought an apartment on credit for 150 thousand PLN, in 2007-m could sell it for 300-400 thousand, and make this a great deal of money. Such a prospect pushed the youth to acquire more real estate loans. Young people are earning 3-4 thousand zlotys a month (the average salary in big cities), naperegonki took credit for housing, the cost of which in 2007 has already far exceeded the reality.
To save, Polish public took loans in Swiss francs. This is the Polish specifics - no dollars or even euros and francs was considered a stable currency. The main advantage of these foreign currency loans was much lower interest rate - 3-4% per annum compared with 8-12% for loans in zlotys. Besides, all the time zloty strengthened against the U.S., the euro and the franc of the same, and despite all the people had hoped that this trend will continue.
Those who took loans in 2002-2003 and a small amount, actually won. But others are in serious cover.
the spring of 2008 the first Polish Zloty reached a peak on the franc and other currencies. Maximum at that time were, and real estate prices. However, all hope for further strengthening of the Polish currency, and a further rise in prices for apartments. But the opposite happened: the franc rate increased (from 2 to 3.5 zlotys, then fell and stabilized at the level of 2,9-3,0), which meant an increase in the monthly payment for the loan in half. However, property values declined on average by one third, and banks began to demand additional collateral. Unfortunately, many borrowers lost their jobs. The result - massive problems with the payment of liabilities and the deterioration of the financial situation of Polish banks started to issue loans more carefully and by higher rates.
similar problems faced by private firms and exporters. From the risk of further strengthening of the zloty, they insure, massive redemption currency options. Moreover, these options were asymmetric: in the case of the strengthening zloty bank customer would receive a relatively small gains, but weakening the national currency (which nobody could have expected, but that eventually happened) meant a great deal of loss. The result - a series of bankruptcies, including companies, until recently, considered to be exemplary.
And let's Euro!
If we had the euro, these problems would not exist - all the time, said politicians from the ruling party, Civic Platform. In their view, such a possibility has been: in the eurozone could lead the team to Poland Kazimierz Marcinkiewicz and Jaroslav Kaczynski, located in power in 2005-2007.
Opposition abandons the allegations and argues that it is their government was able to reform public finances and significantly reduce the budget deficit - to 30 billion zloty (3.8% of GDP) in 2005 to 18 billion (2.0% GDP) in 2007-m. And this - one of the prerequisites for the introduction of the single currency. However, the transition to euro party Kaczyński hurry slowly. Right now the adoption of the euro could lead to the impoverishment of the Poles. We must therefore wait until the standard of living in Poland, equal to the average for the EU, but it will happen in 10-15 years, - said the brothers Kaczynski.
According to Donald Tusk, to do everything to ensure that Poland adopted the euro in 2012-m and it is not possible (and this is likely), then in 2013. Premier explains his position this way: when investors see that the Polish government has consistently moving toward the goal, they will cease to treat Poland as a country crisis.
So the government strategy - it is the reduction of budget expenditures and the prevention of excessive deficits. Premier instructed his ministers to find extra 17 billion zlotys (over $ 5 billion). This reduction should not affect wages and investment, which is co-financed EU. How, then, looks like it cuts? It's very simple: the heads of individual departments to reduce all equal to or greater than 10 percent, no matter what this means in practice and the impact on the reporting entities.
Premier agreed that more should save the Defense Ministry, because he has a very big budget. To achieve this goal by Donald Tusk has decided to temporarily suspend the execution of NATO commitments to finance the army. Nevertheless, the Allies did not make on this issue warnings.
Slovak example
When the autumn of 2007 Poles elected a new parliament, Donald Tusk has promised voters a second Ireland. Since the beginning of the crisis that model the ideal country has faded, and the Polish prime example to follow is much closer - on the south side of the Carpathians.
model for Poles to become Slovakia. While many analysts questioned the wisdom of the Slovak way of paying attention to the overvalued rate at which recalculated crown to the euro.
Slovakia
indeed be stable in the sea the crisis that has engulfed central Europe. Although it refers only to the banking and financial system, because the real economy has recently also in a recession. When last fall in the financial markets of Poland, the Czech Republic and Hungary, chaos reigned, as investors fled en masse from these countries, Slovakia, the panic is almost not affected.
Initially
Euro investors acted as depressant. The process of introduction has been very successful - many analysts even believe that the best among all the countries in transition to Euro. According to public opinion, the transition to the euro are satisfied for almost 90% of Slovaks. All of this is a powerful argument for the politicians of the Polish ruling party, which was held in Warsaw several conferences with the participation of Slovak counterparts, which together convince Poles that should go to Bratislava.
As we have noted, the Slovaks switched to the euro at too high rate of crown. However, starting in 2008 on the neighboring currencies are devalued, losing a few tens of per cent of the former value. As a result, in the early years, Slovakia has become about the most expensive country in the region. And here a paradox: if in recent years residents of neighboring Poland, Hungary and Austria, came en masse to ski or shop in Slovakia, then in this season are a very different way.
Slovaks as those rich vuyki with an expensive euro in your pocket, thick series moved to the Polish ski resorts, markets and shopping centers. And in the southern Malopolshe and Podkarpacie not surprise anyone already double the price (in PLN and EUR) and caption (in Polish and Slovak).
reverse side of a strong currency
Too strong crown, which was a transition to the euro, Bratislava, will cost dearly in economic terms. Already in the first quarter of 2009, Slovakia has remained one of the few countries with positive GDP, although even then felt signs of a slowdown, especially the sharp drop in production cars.
The Slovak economy is very dependent on health of the industry. In fact, 35% of industrial production and 40% of exports - are products of corporations VW, KIA and Peugeot. It should be remembered that the high growth of the Slovak GDP in 2002-2007 years was associated with the expansion of globalcorporate investment (not only the car sector), which involved, among other things, cheaper than the neighbors, labor and government bonuses. Of course, the important role played by other factors, such as stable economy, a developed transport infrastructure and convenient location of the region of Bratislava and valleys Vaga (ie there was more investment), not far from the Western European markets.
But then in the struggle to force the investor the Visegrad countries were comparable. Now, when production in Slovakia cost considerably more expensive than the neighbors (except for Austria), the benefits of a common currency may not be enough to save the investment attractiveness of the country. While the crisis continues, and investors fear the volatile Hungary and Ukraine together with Poland, the Czech Republic, Slovakia looks like an island of stability. But once the situation normalizes neighbors, investors will begin to view in the direction of Poland, the Czech Republic and other countries.
Eventually, this process has already begun. And, given the small size of the country, of great importance to the national economy is even such a trifle as the purchase of Slovaks abroad. Practically every Slovak lived at a distance of 150 kilometers from any border - the Polish, Hungarian, Czech, or Ukrainian, and travel to neighboring countries for building materials, clothing and even food items purchased are already organized. Affects Slovaks afford and retreat of tourists, not to mention the difficult situation in the market of automobiles.
In short, the effect of enrichment, which the Slovaks felt thanks revalued by about 15% of crown at the time of the switch to the euro, is now very quickly lost due to a recession. According to the most recent figures, the country's GDP this year to fall by 6.2%. And all this - with a very stable system fundamentals economy created during the reign of reformist cabinet Mikuláš Dzurinda.
Interestingly, the current Slovak government behaves as if there is no recession. No specific reductions in spending will not, leaving a budget deficit expected to reach 4 billion euros, representing 6.5% of GDP. The reason is obvious - the parliamentary elections in June 2010 on. The situation is very similar to the last year of Vladimir Meciar in 1997: the economy was still seems to be not in the worst condition, the power did not want to take unpopular decisions, and only the new Dzurinda government has identified a huge deficit, and other hidden problems.
Should not be a hindrance visa problems, the high rate of the euro may benefit from the western regions of Ukraine, above all, Uzhgorod. In a crisis Slovak managers will increasingly use outsourcing, and more tasks will be entrusted to firms from the East country, where there is still no shortage in the labor force, and wages are much lower. And from Eastern Slovakia and Uzhgorod and Mukachevo - hand lodge. Already Zakarpattia business is working with entrepreneurs from Slovakia Michalovce, Kosice and Pryasheva, and it would be a potential partner for Slovakia's international offices of companies that will seek ways to cut costs.
not know just who will be in Uzhgorod at that time to work. The current crisis could cause another wave of emigration of the inhabitants of Transcarpathia, not only in the neighboring countries of Central Europe …
Yaqoub Loginov (Poland-Slovakia)
Guley assesses the technical re-equipment of offices Oschadbank to counter robbed 1 billion hryvnia
GIU sold half
The market expects the Fed signals on the level of rates before the end of the year
Analysis - Results of the day
Landmarks of the week
Where is civil society in Ukraine?
The market has woken up on Friday
Deposits of legal entities - Market Review
Deposit for private individuals - Market Review