EZA 796 Briefing Note:

25 June 2007

Poland
Economic self-interest leads Polish compromise on EU treaty The Polish government’s acceptance of a compromise on the EU constitution treaty that slightly reduces its weight in the EU council after 2017 is much more in its own national interest than widely perceived in the international press. Quest for a bigger say in EU affairs in the constitution treaty reflects the EU-sceptic position of the majority of the right of centre government under Jaroszlaw Kaczynski.

But the economic case for Poland in the “constitution row” was always weak, given Poland’s reliance on EU funds to restructure its oversized agricultural sector and accommodate Poland’s integration in the EU economy. The same applies to growth performance, since this relates to a large extent to stimulatory monetary and fiscal policies, partly based on credibility borrowed from EU commitments.

Asset conclusions: acceptance by Poland of a compromise on EU reform, should help bolster strong growth and contain the risk of being affected by potential emerging market volatility.

© Graham Bishop