Case 2 !!

Case 2
Poland: Eastern Europe's Economic Miracle 

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BedrijfseconomieWOStudiejaar 3

This lesson contains 27 slides, with interactive quizzes and text slides.

Items in this lesson

Case 2
Poland: Eastern Europe's Economic Miracle 

Slide 1 - Slide

Summary of the Case
Joined the EU in 2004

Impressive economic growth during 2008-2009:
1. Market-based economic policies
2. Fiscally conservative
3. Contractionary monetary policy

Slide 2 - Slide

Market-based economic policies
Poland shifted away from the centrally planned Soviet model
Implemented market-based economic policies -> Shock Therapy
  • Opened it's market to international trade
  • Liberalization of prices
  • Elimination of subsidies
  • Introduction of a new currency (the Zloty)


Slide 3 - Slide

Fiscally conservative
Poland kept public debt in check -> investor confidence

When debt is kept in check:
  • Positive signal to investors
  • Poland manages it finances responsibly
  • Keep inflation under control

No large outflow of funds in 2008-2009

Slide 4 - Slide

Contractionary monetary policy
  • Decrease the money supply
  • Raise interest rates
  • Reduce inflation



Poland was able to prevent the formation of an asset bubble


Slide 5 - Slide

Challenges for Poland

1. Aging workforce
2. Changes in social transfer policies
3. Poland maintains a mixed economy

Slide 6 - Slide

Aging workforce
As a result:
  • Shortage of labour
  • A decline in economic growth

Therefore Poland needs immigrants

Slide 7 - Slide

Changes in social transfer policies

  • Lowering the retirement age
  •  Rasing social security payments
  •  Younger workers will bear the burden

This can even exacerbate the existing labor shortage

Slide 8 - Slide

Poland maintains a mixed economy
Privatization: transferring ownership of state-owned -> private sector
  • Still significant state-owned businesses
       - Major banks, mining, energy etc. 
Private ownerships:
  • More efficient management 
  • Better financial performance
  • Increased competition

Slide 9 - Slide

Questions
1. Thinking about what we learned about national differences in the class, please briefly
explain how Poland is similar to or different from the Netherlands?

2. What are the potential losses for Poland to join the European Union? In your opinion, has
the Polish government efficiently managed such costs since its EU membership in 2004?
Why or why not? Please briefly explain how your conclusion can be justified.

3. In a more anti-globalization era nowadays, what economic headwinds might Poland face
going forward and what additional economic policies can the government pursue to keep
the economic growth sustainable? Please be practical but not overly general about the
potential economic policies.

Slide 10 - Slide

Q1. Thinking about what we learned about national differences in the class, please briefly explain how Poland is similar to or different from the Netherlands?
Political System
Legal System
Economic System

Slide 11 - Slide

Political System


Collectivism or Individualism
Totalitarian or Democratic

Slide 12 - Slide

Economic System


Market Economy
Command Economy
Mixed Economy

Slide 13 - Slide

Legal System


Common Law
Civil Law
Theocratic Law

Slide 14 - Slide

Physical Issues
Collectivism
Democratic
Judges interpret law
Individualism
Civil Law
Mixed Law
Mixed Economy
Market Economy

Slide 15 - Drag question

Question 2 
What are the potential losses for Poland to join the EU? In your opinion has the polish government efficiently managed such costs since its EU membership in 2004? 

Slide 16 - Slide

Potential Losses of joining the EU
  •  Loss of sovereignty  
  •  Economic and legal adjustments
  •  Outflow of workforce 
  •  Loss of cultural identity
  •  Political tensions between country and EU

Slide 17 - Slide

Government actions to deal with potential losses
Loss of sovereignty
  • all member states give up some of their sovereignty 
  • foreign investors buying away polish agriculture land
  • connected to the cultural differences between members
  • actively influencing  EU laws  
  • actively blocking EU laws (EU Foreign Policy, AI Strategy)
Conclusion:
  • no significant loss of sovereignty 

Slide 18 - Slide

Government actions to deal with potential losses
Economic and Legal Adjustments
  • economic system change (planned economy -> market economy)
  • adjust legal framework to match EU  
  • adjustment of agricultural policies to meet EU standards 
  • no euro currency 

Conclusion:
  • good job at making the changes necessary to avoid losses 

Slide 19 - Slide

Government actions to deal with potential losses
Outflow of Workforce 
  • working in member states through bilateral agreements 
  • more migration than expected before joining 
  • highest percentage of citizens living abroad in EU 
  • massive workforce problems 
  • tax reductions and increase of pension funds 
Conclusion:
  • really bad job at keeping the workforce in Poland 

Slide 20 - Slide

Government actions to deal with potential losses
Loss of Cultural Identity 
  • fear of western influence 
  • fear of losing christian identity 
  • increased through immigration 
  • nationalistic parties using it to spread fear

    Conclusion:
    • little loss of cultural identity 

    Slide 21 - Slide

    Government actions to deal with potential losses
    Political Tensions
    • criticism on stance on different topics 
    • concerns connected to the misuse of EU funding and corruption
    • potential to harm reputation

      Conclusion:
        • tensions raised but were moderated in a good way 

        Slide 22 - Slide

        Benefits of joining the EU

        Slide 23 - Mind map

        Question 3
        Q3: In a more anti-globalization era nowadays, what economic headwinds might Poland face going forward and what additional economic policies can the government pursue to keep the economic growth sustainable? 

        Slide 24 - Slide

         Potential Economic Headwinds Poland
        • Trade Barriers
        • Reduced Foreign Investments
        • Slowdown in Global Growth

        Slide 25 - Slide

        Potential economical policies 
        • Diversification of exports
        • Investment in innovation
        • Attracting foreign investments
        • Increasing domestic consumption
        • Strenghten regional trade agreement

        Slide 26 - Slide

        Thank You!

        Slide 27 - Slide