Polish economy booms in European wasteland

From shiny trams gliding past this city’s crowded shopping streets and trendy cafés to its slick new office buildings, it’s no secret that Poland’s economy is booming.

As deepening crises in Spain, Greece and Italy threaten to break up the euro zone, Central Europe’s largest economy continues to grow, as it’s been doing since Poles joined the European Union in 2004. But with the euro crisis affecting Polish exports, that may not be the case for long.

Dubbed the “green island” among weaker states to the east and debt-ridden ones to the west, Poland’s success is visible in the small but expanding number of middle- and upper-class people on the streets of Warsaw, Krakow and Wroclaw, a city of 600,000 in the west of the country.

“When you look at GDP in Europe in 2009, all countries were in the red — that is, all but Poland,” said Marian Moszoro, who was deputy finance minister between 2005 and 2006.  EU membership helped open Poland to trade and investment from many multinational companies.

But experts attribute the country’s recent economic achievement to other factors, including a healthy banking sector, low levels of debt and cheap labor costs.

Poland’s population of 40 million also provides a large market for domestic goods that are now in demand, thanks to the success of comprehensive economic reforms in the 1990s that encouraged rapid expansion in the private sector.

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