History in the Making: Eight Years After the Referendum, on the Eve of the European Union Presidency

Eight years ago we won the referendum on the accession to the European Union. I say ‘we won’, because it was indeed a success and a great step forward for the Polish nation, yet there were people which doubted it and there where politicians who were acting against such a move. Immediately after the referendum I stepped down from the government in which I was – for the fourth time, following three subsequent governments in 1994-97 – deputy prime minister and minister of finance. I decided to leave the government already in January, yet not before winning the referendum and not before securing the return of the Polish economy on the path of fast growth.

And we’d done it! After an ill-advised neoliberal policy of overcooling – if not overkilling – from 1998-2001, the economy was brought to stagnation at the end of 2001. The rate of growth was miserable – as was the policy leading to stagnation – since GDP increased in the fourth quarter of that year by just 0.2 percent.

Yet after changing the policy and launching the program of structural reforms and socio-economic development, known as “Program of Public Finance Reform”, or PNFR, the economy had momentum. And it was rather fast. In the aftermath of the policy shift, the GDP grew already by 7.0 percent in the first quarter of 2004. It was possible because the strategic economic and social aims were defined properly, and because policy relied on proper economic theory. These are also the lessons for the future. Be sure to design the targets of economic policy adequately, and don’t base the policy on wrong theoretical concerns.

Source: Central Statistical Office, Warsaw (various years)

You may read more on this successful approach online. In Polish from my books “O Naprawie Naszych Finansów” (http://www.tiger.edu.pl/aktualnosci/Polska_z_globalizacja_w_tle.pdf), and “Polska z globalizacją w tle” (http://www.tiger.edu.pl/aktualnosci/Polska_z_globalizacja_w_tle.pdf), and in English, inter alia, in my papers,: “Two-thirds Rate of Success. Polish Transformation and Economic Development, 1989-2008” (http://www.tiger.edu.pl/kolodko/working/wider/RP2009-14.pdf) and “Two Decades of Great Postsocialist Transformation – and What Next?” (http://www.tiger.edu.pl/aktualnosci/2011/03/Transformation_and_What_Next_No4_2010.pdf).

If not for then – the winning referendum – there wouldn’t be the now, the forthcoming of Poland’s presidency in the European Union. History in the making…

Grzegorz W. Kolodko, former four times Poland’s deputy prime minister and minister of finance, is professor of  political economy at Kozminski University and author of “Truth, Errors, and Lies: Politics and Economics in a Volatile World’”(http://www.cup.columbia.edu/book/978-0-231-15068-2/truth-errors-and-lies), Columbia University Press, 2011.