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Economic Impact on new countries

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Poland

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Following Poland's entry into the European Union in 2004, Poland will have seen several changes in its economic indicators due to its regime change but also the Cophenhagen criteria it followed[1].

Growth

We must consider that Poland represents the 8th country that has one of the greatest European economies given that it has more than 38 millions consumers representing one of the most important economies in the European Union. During the communist state period, the GDP growth rate was close to zero with an average 0.4 for the 1981-88 period. The country started in 1990 in recession, at the end of the communist regime, with a growth of -7%[2]. Nevertheless, growth will rise again during the 1990s to reach 4.56% in the early 2000s[3]. The pre-integration period will be marked by a 3% drop in 2001 and will recover before European integration to reach 5% in 2004 and cumulate to 7% growth in 2007 before the Financial economic crisis. The crisis will slow down growth and stabilise it for the next decade at around 4% growth per year[4][5].

The fact that Poland succeeded to strengthen its economy is due to its large domestic market, the different reforms and favorable policies which always emphasize political and economic integration. For example, the fact that large domestic market and competitive advantages are an advantage to SMEs also represents a source of growth[6]. We must not forget that the large Domestic market represents 61% of the total GDP of Poland which is beyond the result known for the EU average[7].

Unemployment

During the communist regime, the official unemployment rate was 0% but after the of the regime, the unemployment rate rose highly. Poland started the 21st century with an unemployment rate of 16%. This will fall sharply between 2004 (when Poland joined the European Union) and 2008 reaching 7%. The unemployment rate will rise slightly after 2008 as a result of the economic crisis and will peak in 2011 at 10%. This increase will be absorbed in the following years to reach 4%, lower than the pre-crisis rate[8]. Concerning employment, 66% of the population working is between 15 to 64 years old which is slightly beneath OECD employment average of 68%[9].

According to the BAEL poll (which is a poll made on the economic activity of the Polish population), even though employment seems to hit good scores, there should be highlighted that the labor market is not the same from one city to another. Indeed, one of the problems is that there are territorial disparities meaning that in some districts, the unemployment rate seems to be higher than in the national average[10]. These disparities have various causes but one seem to be linked to the history of the country. Western regions which were part of Germany before 1945 and the Oder-Neisse Line

Oder-Neisse Line and unemployment rate in Poland in 2016

were Industrialized such as Pomerania with Gdansk or Lower Silesia with Wroclaw (called Breslau before 1945) and have a lower unemployment rate, an higher GDP compared to Eastern regions which were highly agricultural and suffered from an higher unemployment rate[11].

Trade Balance

One of the most significant impact of the regime change, the Copenhagen criteria and the integration of the European Union is on the polish Trade Balance. Starting with positive 2% of the GDP in 1995, it started to decrease the next year until 2000 when the trade balance reached -6,49%. The trade balance became positive in 2013 with 1,44%. in 2019 the trade balance peaked at 4,71%, its maximum for the two last decades.[12]

Poland Trade balance from 1995 to 2019

Disparities and inequalities

Following the transition from a communist regime to a liberal democracy, the GINI index will evolve from 26 points in 1990 to 33 in the 2000s and stabilise at this level, notwithstanding the crisis[13]. The most striking impact of the 2008 crisis concerns the standard of living. The growth of median income per year was on average 20.6% between 2000 and 2008 but will decrease to 6% after 2008 and stabilize at this level.

Lithuania

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Lithuania followed the same path as the other Baltic countries when it joined the European Union in 2004. Having emerged from the USSR, this country was in a particularly difficult economic situation.

Growth

The growth rate was negative at the end of the USSR with -5.7% but will increase and stabilise at 3.7% in the 2000s before falling sharply to -14.84% one year after the 2008 crisis. Thereafter the growth rate will stabilise at around 3.84% until 2018.[14]

Unemployment

Starting with an official unemployment rate of 1% in 1990 when it emerged from the USSR, the rate soared until the early 2000s when it reached 16%. This rate will decrease with its entry into the European Union to reach 8% in 2008 before the crisis[15]. However, the 2008 crisis will bring the unemployment rate back to its 2000 level only to start decreasing again in 2014, when it will reach 16%. However, the country has recovered and will have an unemployment rate of 8% in 2018[16].

Disparities and inequalities

Inequalities, like in other communist countries, will increase when they entered in liberalism with a gini coefficient rising from 26 in 1990 to 30 in the 2000s, the index will rise again in 2008 and reach 37 as one of the consequences of the crisis[17]. The standard of living will have risen sharply between the years 2000 and 2008 with a growth in average median income of 35% per year. However, it will decrease sharply as a result of the crisis and will provide a growth in average median income per year of 6.8% after the crisis.[18]

  1. ^ Kundera, J. (2015). Poland in the EU: How to Deal with Economic Crisis. European Studies-the Review of European Law, Economics and Politics, 2(1), 142-170.
  2. ^ Belka, M. (2013). How Poland's EU membership helped transform its economy. Group of Thirty.
  3. ^ Mage Bertomeu, S. (2004). Ouverture commerciale et croissance-Une analyse en équilibre général appliqué au cas de la Pologne (Doctoral dissertation, Paris 9).
  4. ^ "Report for Selected Countries and Subjects". www.imf.org. Archived from the original on 24 December 2019. Retrieved 2019-04-12.
  5. ^ Kundera, J. (2015). Poland in the EU: How to Deal with Economic Crisis. European Studies-the Review of European Law, Economics and Politics, 2(1), 142-170.
  6. ^ Mage Bertomeu, S. (2004). Ouverture commerciale et croissance-Une analyse en équilibre général appliqué au cas de la Pologne (Doctoral dissertation, Paris 9).
  7. ^ Freriksson, E. (2019). How Poland’s ‘golden age’ of economic growth is going reported. Retrieved from https://www.euronews.com/2019/06/25/how-poland-s-golden-age-of-economic-growth-is-going-unreported-view
  8. ^ "Report for Selected Countries and Subjects". www.imf.org. Archived from the original on 24 December 2019. Retrieved 2019-04-12.
  9. ^ OECD Better Life Index. (s.d.). Poland. Retrieved from http://www.oecdbetterlifeindex.org/countries/poland/
  10. ^ European Commission. (s.d.). Informations sur le marché du travail. Retrieved from https://ec.europa.eu/eures/main.jsp?catId=2789&acro=lmi&mode=&recordLang=fr&lang=fr&parentId=&countryId=PL&regionId=PL0
  11. ^ Opiłowska E., «Regionalisation in Poland: background, features and public perception. A first appraisal», Belgeo [Online], 2 | 2019, Online op 24 mai 2019, geraadpleegd op 27 mars 2021. URL: http://journals.openedition.org/belgeo/34254; DOI: https://doi.org/10.4000/belgeo.34254
  12. ^ Matkowski, Z., & Próchniak, M. (2004). Real economic convergence in the EU accession countries. Prace i Materiały Instytutu Rozwoju Gospodarczego SGH, 75, 258-284.
  13. ^ Albu, L. L. (2012). The convergence process in the EU estimated by Gini coefficients. Romanian Journal of Economic Forecasting, 4, 5-16.
  14. ^ Matkowski, Z., & Próchniak, M. (2004). Real economic convergence in the EU accession countries. Prace i Materiały Instytutu Rozwoju Gospodarczego SGH, 75, 258-284.
  15. ^ "Report for Selected Countries and Subjects". Retrieved 10 September 2018.
  16. ^ "Report for Selected Countries and Subjects". Retrieved 10 September 2018.
  17. ^ Albu, L. L. (2012). The convergence process in the EU estimated by Gini coefficients. Romanian Journal of Economic Forecasting, 4, 5-16.
  18. ^ Matkowski, Z., & Próchniak, M. (2004). Real economic convergence in the EU accession countries. Prace i Materiały Instytutu Rozwoju Gospodarczego SGH, 75, 258-284.
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