Media about Forum

 

The euro was like a sleeping pill ahead of the global economic crisis, as countries failed to wake up to the need to reform, European Commission President Jose Manuel Barroso said Wednesday.
"I don't want to think how we would be now if we didn't have the euro," Barroso told the 20th Krynica Economic Forum, an annual gathering in Poland of politicians and business leaders dubbed the "Davos of the East".

"But nevertheless, the euro was to some extent a sleeping pill, because there was not the pressure for some of the countries to make reforms. So they were keeping very high levels of debt," he said.
The euro has been in circulation since 2002, a decade after the Maastricht Treaty opened the way for a shared European currency.
Speaking to reporters, Barroso noted that before the creation of the eurozone — which now has 16 member states — market pressure could have forced debt-ridden, slump-embattled countries to undertake reforms and devalue their national currencies. Although eurozone member Greece has been the main focus, Barroso declined to name any individual nations.
"Which countries? All the countries that have excessive levels of debt, all of them. There are so many that I'm not going to name each of them," he said.
The past failure to wake up came despite repeated warnings from the European Commission, Barroso said. The commission is the executive body of the 27-nation European Union.
"The euro is a very, very good thing. So when I say it was acting as a sleeping pill, I'm not blaming the euro. I'm putting the blame on those that did not implement what is in the treaty," he said. 
The EU's Stability and Growth Pact, part of the Maastricht Treaty, includes measures such as capping the shortfall between state spending and revenues. "If all the member states had implemented the Stability and Growth Pact, we would not be in the situation we have been facing of huge deficits and huge debt levels," said Barroso.
"So the problem is not the euro, the problem is that some member states, in fact the majority, did not implement what was in the treaty they themselves signed," he added.


Barroso-Looking Man Fools Finn (By Stephen Fidler)
The daily European Commission press briefing stirred briefly into life today when a Finnish reporter asked how the commission President José Manuel Barroso felt about the fact that police in Finland were searching for someone who looked like him.  Spokeswoman Pia Hansen didn't know. But it seems a shame to leave it there. We at Real Time Brussels wanted to get to the bottom of the story: Why are police searching for someone resembling Mr. Barroso? We tracked the story down at a leading Finnish newspaper.  We found the story but, since Finnish is difficult, we turned to Google Translate to describe what happened. However, even when machine-read into English, Finnish remains almost equally incomprehensible. Here's the headline of the story: "Police searches of the EU Commission President sighted charlatan." The charlatan in question is described in the article as "Barroso-looking man." Fortunately, we don't have to rely on Google Translate to do our translations from Finnish, because we have an in-house Finn here at Real Time Brussels. The story seems to be (approximately) that Barroso-looking man was disposing of designer clothes in the back of his Mercedes, which later turned out to be fake. Presumably, it was the man who paid €200 for the fake fashion who demonstrated his unusual grasp of European Union affairs by noting his resemblance to Mr. Barroso. Let the machine translation take up the story: "The men went together to the nearby bank for the auto, and Sipoo kind of paid products, 200 euros. Barroso-looking man left the scene after receiving the money." What did the knowledgeable European get for his money? "Among other things, four leather jacket looking jacket in a plastic bag , the four men's shirts, two ties and two belts cardboard portfolio."


Polish state-controlled utility Tauron TPE.WA, which made its debut on the Warsaw bourse in June, may be included in the blue-chip WIG20 .WIG20 index this year, the head of the bourse said on Thursday.  "There will be another revision of the WIG20, and then changes will be implemented. By year-end it is possible Tauron will be included in the WIG20," Ludwik Sobolewski told reporters during an economic forum in Krynica, southern Poland. Tauron, worth nearly 9 billion zlotys ($2.9 billion), had been expected to enter the index of top 20 Warsaw companies in June and then again in September, but the company's value and traded volumes fell short.  Tauron shares have risen nearly 11 percent since the company started to trade on the Warsaw bourse, hitting 5.6 zlotys on Thursday. (Reporting by Wojciech Zurawski, writing by Patryk Wasilewski; Editing by Will Waterman) ($1=3.106 Zloty)


How to make Central Eastern Europe accelerate its arduous convalescence? 
Such was the question that preoccupied 2500 participants of the 20th Economic Forum in Krynica, Poland. (…) 
The predominant opinion was summarised by Juan Delgado, chief economist at the Spanish Competition Authority, who concluded that “what we need is more Europe”.


In Poland, Barroso predicts 'Europe 2020' success
Speaking at the 20th Economic Forum for Central and Eastern Europe (CEE) in Krynica, European Commission President José Manuel Barroso said he was confident that the 'Europe 2020' economic strategy would succeed where its predecessor had failed. EurActiv Poland reports.
Background
The Economic Forum is one of the most significant international events in the region, billing itself as the 'Central European Davos', in reference to the annual World Economic Forum in the Swiss town. Among this year's attendees are the presidents of Poland, Ukraine, Estonia and several EU figures, including European Commission President José Manuel Barroso and European Parliament President Jerzy Buzek.
Three topics dominate the agenda this year: the EU's Eastern neighbours, energy and the economic crisis. EurActiv is staging its own seminar during the forum, entitled 'Effective communication: How to get a message across to EU decision-makers', with Commission Vice-President Maroš Šefčovič as the main speaker.
The 20th Economic Forum opened on Wednesday (8 September) in Krynica, Poland with a message of optimism from the Commission president.
The four-day event, hosted every year in this small spa town close to the Polish-Slovak border, gathers officials and representatives of large companies, NGOs and the media from across Central and Eastern Europe (CEE) and neighbouring countries
Barroso, the first prominent panellist, was faced with a difficult question: why should the EU's 'Europe 2020' strategy for jobs and growth succeed where its predecessor, the Lisbon Strategy, had failed?
The first reason he gave was the changed context: today, thanks in no small part to the economic crisis, nobody doubts the interdependence of Europe and the world. There is great awareness of the need to ''think European and act globally,'' he said.
On a similar note, the Commission president talked about a heightened sense of urgency that had gripped Europe. On a global level, the EU is facing ever stiffer competition, and therefore must adapt to this highly competitive new environment.
Whereas the Lisbon Strategy set macroeconomic targets for the EU, Europe 2020 focuses on holistic goals, he explained. Increased competitiveness and social and environmental obligations are linked to the completion of the common market.
In this context, the 'Single Market Act', set to be unveiled by the Commission this autumn, will be an important milestone, he said. Barroso expressed hope that the Act would be implemented during the Polish Presidency in the second half of 2011.
Buzek: Lisbon Treaty has EU standing on four legs
Jerzy Buzek, president of the European Parliament and a former Polish prime minister, opened the first panel session with a metaphor: with the Lisbon Treaty in force, the EU is like a table standing firmly on four legs. It has an executive – the Commission – which acts as a form of European government. It has a parliament with two houses – the Parliament and the Council – which adopt European legislation. And it has the European Council, now a formal institution, which has a ''collective president'' deciding on the future strategic direction of the Union, Buzek said.
The Lisbon Treaty is absolutely the right response to the hopes and concerns of European citizens, added recently-elected Polish President Bronislav Komorowski.
The Polish leader outlined his country's priorities for its 2011 EU presidency, listing foreign and security policy, strengthening economic competitiveness and energy solidarity and liberalisation highly among these.

Estonian president: Don't discriminate against new members
Estonian President Toomas Hendrik Ilves also touched upon EU foreign policy, raising the issue of the under-representation of new member states in the upper echelons of the EU institutions. He referred to the European External Action Service – the EU's new diplomatic corps, which is currently being put together.
EU foreign policy will never be truly ''common'' if the full participation of all member states is prevented by discriminatory rules, he stated. On a similar note, he spoke openly about discrimination against the EU's new members in the Common Agricultural Policy.

De Maizière: Economy and security must go hand in hand
Thomas de Maizière, Germany's interior minister, stressed the need to strike a balance between economic interests and freedom of movement on one hand, and internal security needs on the other. He cited the Schengen Area as an example, a move that practically abolished internal borders in the EU but also increased the need for information sharing and better coordination and cooperation – particularly with countries on the EU's periphery.
The minister stated that solutions to the bloc's economic problems must take security into account and vice-versa. The Lisbon Treaty has created basic preconditions for this, he added.


Belka Says Polish Budget Deficit Unlikely to Spur Inflation, Higher Rates
Poland’s proposed 2011 budget deficit probably won’t add to pressure for higher interest rates because it isn’t likely to spur inflation amid a “moderate” economic recovery, central bank Governor Marek Belka said.

The government last week approved a draft budget that would cut the deficit by a fifth to 40.2 billion zloty ($13 billion). The plan includes savings from improved cash management and record dividends from state companies.

“The economy is rebounding but at a very moderate pace, so the deficit is not really endangering the demand side of the economy,” Belka said yesterday during an interview in Krynica, Poland. “I’m happy that the government has undertaken an effort to squeeze a few billions of zloty more out of the budget to reduce the projected deficit. I hadn’t expected more.”

The comments may cool expectations for a rate increase, after two central bankers said borrowing costs should be raised quickly to control price increases. The Monetary Policy Council in August left the benchmark rate at a record-low 3.5 percent for a 14th month, saying the economy had stabilized and inflation was in line with expectations.

“The dovish comment from Belka shows he is not in favor of fast interest rate increases,” said Jaroslaw Janecki, chief economist at Societe Generale SA in Warsaw. Still, some policy makers “will push for hikes,” he said.

What Drives Prices
While the central bank will act if rising demand pushes prices higher, it won’t have to act if the increase is temporary or caused by one-time events such as next year’s planned increase in the value-added tax, Belka said today.

“It is not about the inflation rate level,” he told reporters in Krynica. “It’s more about what drives the price growth.”

Consumer prices rose at an annual rate of 2 percent in July, and the Finance Ministry estimates the rate accelerated to 2.1 percent in August. Inflation may pick up as rising employment boosts consumer demand.
The unemployment rate dropped to 11.4 percent in July from a high to 13 percent in February. Poland’s economy expanded 3.5 percent from a year earlier in the second quarter as growth accelerated from the slowest in a decade last year.
While the inflation rate may “creep up” to more than the target of 2.5 percent this year, it “should not exceed this substantially, and some forecasts show this could be temporary,” Belka said in the interview.
‘Probably Exaggerated’

“Altogether, I don’t think inflation pressures are mounting,” said Belka, who has the power to break ties on the 10-member rate-setting panel. “This is something that is probably exaggerated on the economic landscape in Poland.”

Belka said he “cannot be sure” whether recent gains in the zloty will turn into a longer-term trend and help keep prices in check. The Polish currency has risen 1.8 percent against the euro this month. The zloty rose to 3.933 per euro as of 12:20 p.m. in Warsaw, from 3.9406 yesterday.
“There are some indications that the sentiments on financial markets remain still very volatile, and this is the main driver of the movements on the zloty,” he said. “We can see some weakening and some strengthening. We are quite philosophical about them as long as they are not dramatic.”
The government said Sept. 3 that its draft 2011 budget would keep public debt below 55 percent of gross domestic product, a level that would trigger mandatory spending cuts.
No Breakthrough

Still, Belka said the plan “is not really a breakthrough budget” and “more will have to be done” in 2012 because loose fiscal policy may boost debt costs.
“We should not forget in these turbulent times on the markets that if you are stuck with a high budget deficit at one point, the markets could start looking more closely at it and start demanding higher yields,” he said. That “is a problem because we want to keep the cost of public debt servicing at the current level.”
Belka said the government’s forecast for 3.5 percent economic growth next year is “quite conservative,” and he doesn’t expect any negative impact from a potential slowdown in western Europe after the European Central Bank upgraded its forecasts for this year and next. About 80 percent of Poland’s exports go to other European Union countries.
“I believe there is enough internal growth potential in the economy, which will allow for faster growth if the external circumstances are favorable,” Belka said today.

Monika Rozlal, Bloomberg


Warsaw exchange on track for state sell-off

The public offering of the Warsaw Stock Exchange is on track for the end of this year, said Aleksander Grad, the Polish Treasury minister, adding that the government will retain a stake of 25-30 per cent in the bourse.

“We will stay on as a strategic partner,” Mr Grad told FT Trading Room at the annual Krynica economic forum, held in a Polish mountain resort.

 

The exchange, 98 per cent owned by the state, will carry out an initial public offering fter efforts last year to sell it to a strategic investor fell through, following the collapse of talks with German exchange operator Deutsche Börse.

The shares will be offered in a general sale, not to a particular investor, after last year’s determination that the exchange should remain independent, part of a long-term project to build a regional financial centre in Warsaw.

Earlier this year, the WSE struck a strategic partnership with NYSE Euronext that will see Warsaw adopt the group’s “universal trading platform” for its cash and derivatives markets. “Co-operation has already begun,” said Ludwik Sobolewski, the WSE’s president.

Warsaw, which in recent years has overtaken Athens and Vienna to become the region’s largest bourse, has been expanding its offering to maintain its lead. New Connect, an alternative trading system for small companies, has already attracted 155 listings, and is starting to pull in start-ups from beyond Poland.

The exchange has been expanding its Catalyst bond trading latform. It plans to offer exchange-traded funds by the end of this month.

It is unclear what the continued government stake in the WSE will mean for its expansion plans, however.

Earlier this decade Warsaw was stymied in its efforts to buy exchanges in Vilnius, Prague and elsewhere in the region because of government ownership.

In the meantime, those smaller exchanges have been bought by larger bourses like Vienna, which is busy building up a network in the region by taking stakes in three smaller bourses – Hungary’s Budapest Stock Exchange, in which it has 50.45 per cent; the Ljubljana Stock Exchange in neighbouring Slovenia, in which it has an 81.01 per cent stake; and the Prague Stock Exchange, of which it owns 92.74 per cent.

In January Vienna finalised a new holding structure for Vienna and its three counterpart exchanges, called CEE Stock Exchange Group, or CEESEG.

While the Vienna exchange by itself is smaller than its Warsaw counterpart by market capitalisation, the combined market capitalisation of the CEESEG is larger than the Polish exchange.

Warsaw now sees its future in expanding the WSE and persuading companies from across the region to list there, and less in acquiring stakes in foreign exchanges.

 

 

Jan Cienski, Financial Times


The EU's new member states are being sidelined as the 27-nation bloc's new diplomatic corps takes shape, with western Europe cornering the top jobs, Estonia's President Toomas Hendrik Ilves said Monday.
Appointments are yet to be finalised, but just two ambassadors are being tapped from the ex-communist bloc, he said, referring to ambassadorial positions at diplomatic missions representing the European Commission, the bloc's executive body.
"Now why is that? I don't know. Are old member states' diplomats smarter? I don't know. I don't think so. I do think the rules were made in a way that some people had a preference," Ilves said.
"A situation in which you have two people from Eastern Europe, where there are 100 million people… and seven from Belgium, where there are 10 million, is not a viable way of creating the belief in people that the foreign policy institution of the EU is in their interests."
Speaking at the Krynica Economic Forum — an annual gathering in Poland of politicians and business leaders dubbed the "Davos of the East" — Ilves complained that warnings he had issued more than a year ago had gone unheeded.
"Of the then European representations abroad, of the 150 representations, one was headed by a person from a new member state," he said.
The situation has barely improved since the formal launch this year of a new diplomatic service representing the European Union, aimed at raising the bloc's global presence, he said.
Ten states, most of them formerly communist, joined the EU in 2004 in its largest-ever expansion.
The EU expanded to its current 27 members when ex-communist Bulgaria and Romania joined in 2007, bringing the bloc's total population is just over 501 million.


President Toomas Hendrik Ilves attended the Krynica Economic Forum on Wednesday, discussing with other European leaders the future of the EU after the economic crisis, reported BC the President’s Chancellery.
“We will be successful as Europe if we will be able to enhance our competitiveness beside United States and Asia, further co-ordinate our economic policies between the EU Member States and in general demonstrate better flexibility in the world that is moving at increasing speeds,” said the Estonian head of State.
When taking part in the forum, Ilves introduced Estonia’s experiences in acceding to the euro area despite the economic crisis, also noting that in a sense the crisis had helped shed the lack of balance in the economy that had emerged during the boom years. “Several premises need to be met for new growth and one of them is the accession to the euro area,” he said.
The Estonian President added that Estonia has exited the declining trend and is expecting to achieve a two-per-cent growth in 2010. “At the moment, Estonia’s economy is balanced better than before the crisis, except for the high unemployment rate, which is one of the most critical aspects right now,” he noted.
According to Ilves, the successful recovery of the economic environment in Estonia was largely due to early start to strict cost-cutting practices – for example, the State budget cuts in 2009. “And Estonia was one of the first EU countries that started making such cuts,” he pointed out.
The EU's new member states are being sidelined as the 27-nation bloc's new diplomatic corps takes shape, with western Europe cornering the top jobs, Estonia's President Toomas Hendrik Ilves said Monday.
Appointments are yet to be finalized, but just two ambassadors are being tapped from the ex-communist bloc, he said, referring to ambassadorial positions at diplomatic missions representing the European Commission, the bloc's executive body.
"Now why is that? I don't know. Are old member states' diplomats smarter? I don't know. I don't think so. I do think the rules were made in a way that some people had a preference," Ilves said.
"A situation in which you have two people from Eastern Europe, where there are 100 million people… and seven from Belgium, where there are 10 million, is not a viable way of creating the belief in people that the foreign policy institution of the EU is in their interests," Ilves added.
Speaking at the Krynica Economic Forum – an annual gathering in Poland of politicians and business leaders dubbed the "Davos of the East" Ilves complained that warnings he had issued more than a year ago had gone unheeded.
"Of the then European representations abroad, of the 150 representations, one was headed by a person from a new member state," he said.
The situation has barely improved since the formal launch this year of a new diplomatic service representing the European Union, aimed at raising the bloc's global presence, according to the president.
Ten states, most of them formerly communist, joined the EU in 2004 in its largest-ever expansion.
The EU expanded to its current 27 members when ex-communist Bulgaria and Romania joined in 2007, bringing the bloc's total population is just over 501 million.


The Polish economy could grow by 3.5 percent this year, exceeding earlier estimates ranging from 3.0-3.3 percent, the economy minister said on Thursday.
Poland was the only country in the European Union to achieve economic growth last year.
"We foresee growth above 3.0 percent…but after the second quarter, when we saw significantly better growth than expected, we can confidently forecast 3.5 percent growth," this year, Economy Minister Waldemar Pawlak said.
He made his remarks at a regional economic forum Thursday in Krynica, southern Poland. 
Gross domestic product in the country, which joined the European Union in 2004, grew by 1.1 percent after adjustment in the second quarter of 2010 compared to output in the first quarter, and by 3.8 on a 12-month comparison, officials statistics showed.
Seasonally adjusted growth was 0.7 percent in the first quarter from output in the last quarter of 2009. First-quarter growth on a 12-month comparison was 3.1 percent.
On Monday, the economy ministry released a fresh estimate saying Poland's economy could expand by 3.3 percent this year.
Poland's 2011 draft budget foresees GDP growth hitting 3.5 percent. Its economy grew by 1.8 percent in 2009 compared to 2008. The population totals 38 million.


Thinking Global at Krynica Economic Forum
The Economic Forum in Krynica, organized annually by the Eastern Studies Institute since 1991, is a major event in Central and Eastern Europe. It aims to create a welcoming climate for the development of political and economic ties between the European Union and its neighbors with a special focus on the economies of Central and Eastern Europe. It is widely regarded as complementary to the better know annual “Davos Forum” held in Davos, Switzerland, with an ever increasing list of movers and shakers from this region attending its meetings.
It is noteworthy that Poland, being the host country for this yearly event is the only European country to have withstood the financial and economic crisis that began in 2009. Investors worldwide are starting to see Poland as a safe haven amid somewhat troubled European economic waters. Nearly 2,000 guests from 60 countries have come to the southern Polish town of Krynica to attend the 20th Economic Forum, dubbed the “Davos of the East”, which opened yesterday under the motto “Europe After Lisbon: Strategies for the Future.”
President of the European Parliament Jerzy Buzek, Head of the European Commission Jose Manuel Barroso and Polish President Bronisław Komorowski attended Forum’s opening plenary session
Speaking at the Forum’s opening session the head of the European Commission Jose Manuel Barroso admitted that the Lisbon strategy for the years 2000 – 2010 was not very successful. “ We need not only a monetary but also an economic union and better coordination of activities. The crisis has shown we need to act and think globally for a better economic future for this region.
This year is the first with the Lisbon Treaty in force. The treaty aims to reinforce local and regional governments’ role in the process of shaping of EU political strategies, and to bring the EU closer to a multi-level governance model more akin of the US.
Under the treaty, the EU is expected to focus on the development of new technology, research and competitiveness to become a better counterweight to the economic and political might of the USA. The Lisbon treaty emphasizes the principle of subsidiarity and introduces the principle of energy solidarity for the first time. During the four-day event some 200 prominent politicians, businessmen, scientists and journalists from Eastern Europe will discuss all these topics during more than 100 debates.
Georgia was well represented by Girogi Baramidze, the vice- premier of Georgia and a number of other prominent citizens. The Vice- Premier was a special guest and a resource person in one of the well attended sessions that took a more objective look at the opportunities and threats that collaborating with Russia entails. Mr. Baramidze made a strong presentation reporting Georgia's steady progress in different areas since the 08' conflict and he also took time to meet and dialogue with several other senior officials from key European countries.


EU budget chief Janusz Lewandowski said Thursday he plans to unveil a study on new sources of revenue for the 27 member bloc, likely to include public-private partnerships, in early October.
"I'm in favour of looking for new resources to somehow make the life of finance ministers easier" as EU states struggle with austerity measures, Lewandowski told AFP in Krynica, southern Poland, on the sidelines of a regional economic forum.

"They want to reduce their direct contribution in order to improve their budgetary statistics. My obligation is to present a neutral study, what is feasible as new innovative sources of revenue," he said. 
Lewandowski, however, refused to elaborate whether he was considering a controversial Europe-wide tax that could directly target citizens, vehemently opposed Britain, France and Germany but hailed by Belgium, a tax on the financial sector championed by Paris and Berlin or a bank tax.
"I'm not going to mention this now as it is provoking so much controversy, its better to wait until the beginning of October for the budget review — part of it will be a neutral feasibility study about eventual new resources to partly relieve the austerity budgets of Europe from national contributions," he said.
"I'm an anti-taxation personality as such, rather I favour the market and entrepreneurship," Lewandowski said, pointing to what he called the development of "new financial instruments" in the form of public-private partnerships.
"In times of austerity you have to be creative, as necessity is the mother of invention," Lewandowski said, indicating that public-private partnerships financed in part by the European Investment Bank could prove a feasible source of investment finance.
Last month, the 27 EU member states recommended a 2011 budget of 126.5 billion euros, more than 3.6 billion euros less than the amount sought by the commission and an almost identical figure to the London rebate.
The EU budget now goes to the European parliament, with a conciliation process expected to be invoked if the final figures are to be produced in time for an October deadline.
Lewandowski also explained his controversial recent comment saying "the rebate for Britain has lost its original justification."
"This is very much my personal opinion and we should remember that in 1984 (then British prime minister) Margaret Thatcher successfully won the English privilege on the premises that this is mainly to compensate the lack of British participation in agricultural spending, that was the year when agricultural spending was 70 percent of the European budget," Lewandowski told AFP.
"England was not an affluent country in the early 1980s in comparison with the others, but now this is a rich country and agriculture should be one-third of the European budget, so the original justification is gone," the commissioner said.
"But of course we must take into consideration the British position. They will defend and we need agreement of 27 countries, so this is the opening of discussion," he said, adding the matter was "extremely politically difficult". 
"The UK abatement remains fully justified. It's a matter of fairness," a British government spokesman said recently insisting that without the rebate, Britain's net contribution to EU coffers as a percentage of national income would be twice as big as France's, and one-and-a-half times bigger than Germany's.