Warsaw / Wroclaw / Berlin – It was a classic mockery: “Polish economy” stood for poverty, confusion, ineffectiveness. Berlin got a first impression that there was more to it 30 years ago, when many, many Polski Fiat’s arrived in the city, people on the wasteland at Potsdamer Platz were selling clothes, vodka or sausage. Thanks to the zloty, which is practically worthless compared to the D-Mark, they were able to quickly earn a monthly Polish wage there. However, that was a long time ago in every respect: Poland is now Germany’s fifth largest trading partner, the fourth largest in Berlin, and the IHK Berlin sees the country as a “stability anchor” for the capital’s economy in the Corona crisis.
In 2020, Polish-German trade totaled around 123 billion euros, almost three times more than Russian-German trade, and has increased astronomically compared to the equivalent of less than four billion euros in 1990.
In terms of deliveries to Germany (from Poland in the amount of 58.1 billion euros), only more goods came from China, the Netherlands and the USA than from Poland. In terms of German exports, Poland was in 6th place with 64.7 billion euros. Italy and Austria were overtaken in 2020.
One could have guessed the development
That seems miraculous. The economist and Germany expert Prof. Dr. Sebastian Płóciennik from the Polish Institute for International Cooperation (PISM) in Warsaw says, however, that one could have guessed as early as 1988 what kind of upswing the Polish economy would take. At that time the communist government opened the borders to the west, people started to do business on the German “Polish markets”.
“At that time, her entrepreneurial energy was shown, the Polish markets were no coincidence.” He also points out, however, that no one could foresee developments at the time, given the hyperinflation and chaotic shortage economy in Poland. As a young man in Zielona Góra, he too was happy about the opening, but without much hope of a lightning-fast recovery, the cornerstone of which was laid after the end of communism with brutal economic liberal reforms.
PISM
Professor Dr. Sebastian Płóciennik
The already growing Polish-German trade relations experienced a boost in 2004 with Poland’s accession to the EU, and ties between the two countries were strengthened. Paradoxically, the next surge came with the 2008 financial crisis. Płóciennik: “Poland hardly suffered from it. The Germans saw that, their companies were looking for a safe place to invest and found Poland much better than Southeastern Europe. ”There are now around 5500 German companies to the east of the Oder and Neisse.
The development in Germany meant that Poland was shown more respect and not just seen as a low-wage country. In Poland, on the other hand, he was proud of the hard work that had been done, of the reforms and of our own flexibility. Dynamic markets, with weak unions, short-term employment contracts and many bogus self-employed people also had a social price.
Poland’s economic output has increased tenfold in 30 years.
Tremendous growth, but wages are still low
Poland is now the sixth largest economy in the EU. The economy has been growing faster than the EU average for more than ten years. The gross domestic product – i.e. everything that is produced in a country in terms of goods and services – increased almost tenfold from 1990 to 2020 to 504 billion euros. However, the incomes are still low compared to Germany: in 2020, an average Polish employee earned 7143 euros net per year, his German counterpart 22,388 euros.
Anchors of stability for the Berlin economy
According to the Berlin Chamber of Commerce and Industry, Poland proved to be an anchor of stability for the Berlin economy during the 2020 pandemic crisis. Berlin’s exports rose by 15 percent to 794 million euros (189 percent compared to 2004, the year Poland joined the EU). More was only delivered from Berlin to China, France and the USA. In terms of imports to Berlin in 2020, Poland was behind China, ahead of Italy, the Netherlands, France and the USA with a volume of 2.1 billion euros. That was 16 percent more than in 2019 and 332 percent more than in 2004.
Graphic: BLZ / Hecher, source: Destatis
However, it was easier to bear when unemployment – once at 20 percent – fell steadily: to 3.2 percent in 2020. This also reduced the number of Poles looking for happiness and work in Great Britain and Germany. In the meantime, Poland itself has become a country of immigration for its eastern neighbors.
Many private companies already in communist Poland
Dr. Ewa Łabno-Falęcka, Head of Communications at Mercedes-Benz Polska, tends to see things in a similar way to Płóciennik when it comes to the core of the Polish upswing. In contrast to the GDR, Poland already had a private sector in retail trade and agriculture before 1989, and when the political barriers had broken down, a flood of small private companies of all kinds would have formed. The Poles as a whole are hungry for financial success even more than three decades after the end of communism. In Poland there are also greater career opportunities than in saturated German society, more space to shape things. Poles put very little trust in the state, from which they did not expect anything due to the lack of social security systems.
private
Ewa Łabno-Falęcka von Mercedes-Benz Polska
Poland needed foreign investment. The current government was also “very customer-oriented” when Daimler started building an engine factory in Jawor, Lower Silesia, in a special economic zone west of Wroclaw. The regional authorities have also been helpful, says Ewa Łabno-Falęcka: “Investors are doing well in Poland.” Contrary to expectations, qualified personnel have also been found in Lower Silesia: “Poland still offers relatively well-trained workers. However, technical training in middle school leaves a lot to be desired, but as an employer we offer a wide range of training opportunities. “
Mercedes-Benz has also broken new ground to attract workers – women. More than 40 percent of the workforce in Jawor is female, much more than in any of the other 30+ Mercedes car plants worldwide, where the average is 15 percent. Many women are already foremen or even foremen. “In Industry 4.0, muscles are no longer in demand, but the use of digital technology.”
Polish-German cooperation in companies works well when German work organization encounters Polish resourcefulness, says the former diplomat, who lived in Germany for 15 years and who sees practically no differences in mentality.
Despite all the successes, Polish-German economic relations could need a third boost, says Sebastian Płóciennik. That could result from the corona pandemic of all things, if considerations due to multiple delivery difficulties became reality, for example to bring production back to Europe from Asia.
The Polish IT and gaming scene would also develop very well. Katarzyna Furmaniak, for example, created the IT company SMART-DE in Wroclaw with a partner in 2020: “With a good 26 employees, we mainly develop individual AR-VR applications, mobile and web applications and tailor-made customer software, mainly for industry, Automotive, real estate, healthcare, education, and entertainment industries. We are backed by an IT company with 60 employees, which makes us very flexible. “
Trust has to be built
She has learned lessons from her 21 years of experience, including ten years as sales manager in the metal industry with Germany: “I know the German mentality, especially in industry. It is rather conservative and the German market is not easy. You need patience to gain trust in the reliability of German companies. ”Then, however, it would be possible to establish almost friendly relationships. They are now doing good business with Germany and Austria.
It is also helpful if Polish employees, like their business partner at BMW, have gained experience from Germany, where the industry is more developed than in Poland. The Poles bring along a desire to solve complex problems in business relationships: “We enjoy challenges.” And then comes the word that Płóciennik and Łabno-Falęcka used again and again: “We are flexible.”
However, some Polish engagement in Germany would also go wrong. Lack of capital leads Polish companies to want results too quickly in order to make money quickly. Furmaniak: “Then you build up too much pressure before you are recognized as an equal partner.”
Płóciennik does not paint the situation in pink either: German investments of 36 billion euros in Poland are compared to barely 1.5 billion euros from Poland in Germany. This is fueling a partly political discussion about asymmetries in bilateral relations.
The dependence on Germany is sometimes viewed from a different angle. If in Germany, as is often pointed out, the innovative strength declines and the country were left behind by the USA and China, this would have immediate negative consequences for Poland. A view that Ewa Łabno-Falęcka does not share. Poland is flexible and in 1990 turned its economic relations 180 degrees from the Soviet Union towards Western Europe.
Political turmoil around the gas pipeline
According to Płóciennik, what is really tarnishing cooperation today is politics. The Russian-German Baltic Sea pipeline Nord Stream 2, which has no real friends except in Germany and Russia and is strictly rejected in Central Eastern Europe in particular, is a “catastrophe” for Polish-German relations.
image/Eibner
The “landing station” of the Russian-German Baltic Sea gas pipeline Nord Stream 2 in Lubmin (Mecklenburg-Western Pomerania)
In his branch he observed that young political analysts in Poland in particular were distrustful of Germany. In Germany, on the other hand, he sees a dwindling interest and indifference towards the Polish reservations. In addition, no joint government consultations have been held for two years.
Rule of law disputes and the question of reparations do not make the already tense relationship between Poland and Germany any easier.
It would be good if German companies with more research centers would strengthen Poland’s innovative strength and if both countries could agree on a joint, large prestige project, as Germany and France have with Airbus, for example. That could, Płóciennik thinks aloud, be, for example, a high-speed rail line from Kiev via Warsaw and Berlin to Paris.
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