According to data published by Eurostat and the European Commission Poles are raising labour efficiency while the wage share in Poland’s GDP is among the lowest in the EU and continues to deteriorate. Yet, employers are reluctant to increase wages. For workers to feel wage growth similar to their productivity growth, there must be a stable tax system and more investment.
A long standing Fed President, William McChesney Martin, kept saying that the central bank is like a good chaperone at a party: one that cares that the guests always have enough punch in their glasses. When the atmosphere gets too hot, the punch bowl must be taken away. If spirits are low and the guests are floating about sluggishly, punch must be topped up.
Until recently Poland, the Czech Republic and Slovakia were seen as the countries with the best governing standards, the most solid banking systems, the most open to foreign investors and with generally predictable politics. There used to be a pretty easy split between the good and bad halves of central Europe but today it is becoming increasingly difficult to tell them apart.
In his report, World Bank analyst Marcin Piątkowski predicts Poland’s new golden age. Relative to Western European countries, Poland’s GDP is the highest in 500 years. In 10 years, Warsaw is expected to be a better place to live in than London. It will be appreciated by immigrants from the East, whom we should start attracting now.
Adequate input for R&D is indispensable: without investment there is no innovation – says Peter Dröll, Head of Innovation Unit in the European Commission. It is equally important to have a maximum output. It is hard to define what output of innovation policy there should be.
The Banking Union can be effective and give the potential to break the vicious cycle of fiscal and financial instability only if at the same time all necessary components are in place – a Single Rule Book, a Single Supervisory Mechanism, a Single Resolution Mechanism and financing arrangements. Quick entry to the Union would be beneficial for Poland – told Bernhard Speyer, former Managing Director at Deutsche Bank Research.
Changes in the pension system are neutral for Poland’s present rating but may limit upward mobility of Poland’s rating from the current A2 level. Such a degree of reform reversal would not be likely in countries with the highest rating, says Jaime Reusche, an analyst in the group of sovereign credit risk at Moody’s Investors Service.