Krynica Faces the Crisis

From 9 to 12 September the city of Krynica, located in southeast Poland, hosted the largest and most important financial conference in Eastern and Central Europe: the 19th Economic Forum. West met East as experts, politicians and entrepreneurs from Europe, Asia and America got together to discuss the pressing issues of our time. The purpose of the event, as described by its organiser, the Institute for Eastern Studies, is to create an atmosphere favourable for the development of political and economic cooperation between the participating states.

Amongst the guests were S. Skrzypek, the president of the National Bank of Poland, CEO of Pekao S.A. bank J.K. Bielecki, CEO of LOT Airlines S. Mikosz, Executive Chairman of Polish Telecommunications (TP SA) M. Witucki and Z. Szafrański, President of PKP Polish Railways. The energy sector was represented by the presidents of Polska Grupa Energetyczna, the largest electricity company in Poland, PKN Orlen, Lotos Group and PGNiG as well as the vice president of CEZ Group and of AREVA, a French nuclear power generator.

The conference included nearly 140 debates on subjects concerning macroeconomics, business and management, the Energy Forum, the new economy, international politics and security, the European Union and its neighbours, state reforms, the Forum of Regions, society, education and culture, the Forum of NGOs, investments, privatisation, and economic development.

The main theme of this year’s Forum was European solidarity: 20 years after revolution, from both a historical perspective and against the backdrop of the present crisis. Aleksander Kwaśniewski, former president of Poland, Jerzy Buzek, the president of the European Parliament, Ireland’s Minister for European Affairs Dick Roche, and Jose Maria Aznar, former PM of Spain, attended the opening. At the ceremony, former Solidarity leader Lech Wałęsa emphasised the role of Pope John Paul II in the fall of communism in Poland.

One of the highlights of the conference was the Man of Central and Eastern Europe Award, which was granted to Mr. Buzek. Also, Günter Verheugen, vice president of the European Commission, and Professor Leszek Balcerowicz received special awards as personalities who shaped economic, political and social changes in Central and Eastern Europe. The award for the top company of Central and Eastern Europe went to Maspex Wadowice Group, the market leader in production of juices and soft drinks in Poland, the Czech Republic and Slovakia.

The most important debate was held on the last day of the Forum when Peter Schiff and Edmund Phelps, winners of the 2006 Nobel Prize in Economics, contributed to the debate on our economic future. These leading authorities belong to the few economists who had forecast the crisis even before the fall of Lehman Brothers. In Mr. Schiff’s opinion, the U.S. dollar will no longer be the main world currency by 2030. The fall of the dollar, however, will not stop the world economy as other currencies will become more powerful. The moment the Yuan starts to gain more power, the Chinese will start consuming their production, instead of exporting it, and will finally benefit from their work. Despite his “gloomy feelings” about America’s economic future, Professor Phelps forecasts that the U.S. will maintain its role of economic and innovation leader even though the power of the American economy will wane. Unpopular as the view might seem, Mr. Schiff and Zsolt Hernádi, the CEO of MOL – the largest Hungarian oil company in the region – are convinced that there will be positive aspects of the crisis as it will stimulate more reasonable decisions, cost cuts and the axing of over-ambitious plans.

The organizers see the 19th Economic Forum, the largest so far, as a great success. However, it cannot go unnoticed that in the participants’ eyes, Krynica Zdrój might not be the best location for such an event. As The Economist put it, the venue confirms Poland’s backwardness and lack of organisation. As if to prove the point, the president of Polish Railways arrived in Krynica by car, presumably as the train connections would have been too tedious and time-consuming. However, to give him credit, he met his colleagues at the Warszawa Centralna platform. There are cities in Poland with more convenient airport transfers and reasonable hotels with English-speaking staff. Why not make the 20th Forum take place somewhere that can better show the progress that Poland, along with other countries of the region, has made over the past two decades.

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