It was Polish Independence Day on 11 November and nationalists were once again on the march in Warsaw, but the contentious issues of currency and immigration are not likely to be defused any time soon.
An opinion poll put together recently by the Homo Homini institute put Polish Independence Day a the country’s most popular national holiday. Nevertheless clashes between far-right supporters and the police, as well as ‘anti-fascist’ demonstrators, are becoming a common feature of the anniversary.
The backdrop to this year’s clashes has been a rising fear of a perceived erosion of Polish values, via the country’s membership with the EU. Yet the Polish newspaper Gazeta Wyborcza has recently discussed the demographic imperative of accepting up to 140,000 immigrants, stating that Poland needed to be “less afraid”.
what the heck is going on in Warsaw? https://t.co/AO0dbOZYyl Local reports of hundreds arrested at Polish independence day nationalist riot
— Megan Specia (@meganspecia) November 11, 2014
Another contextual factor and visible symptom of the anti-EU feeling is the growing opposition to adopting the euro as the Polish national currency, dropping the zloty.
A poll by CBOS (Centre for Public Opinion Research) registers 68 per cent disapproval of taking up the euro, while less than a quarter of those asked are in favour of the move. The majority expect accompanying price rises while 27 per cent fear losing control over fiscal policy.
In the past three months both the euro and the zloty have weakened against the US dollar by similar proportions, though the zloty is almost one full percentage point worse off over that time. The graph shows the price of a dollar in euros and in zloty has been steadily rising.
|USD in EUR||0.7299||0.8023||9.92%|
|USD in PLN||3.0552||3.3866||10.85%|
The outlook for both economies is far from sunny, with Poland attributing a sizeable portion of its troubles to its association with the EU – hardly news to placate the far-right nationalists.
The European Central Bank has a target of two per cent inflation, but latest estimates this month put the figure at 0.5 per cent – 0.2 percentage points below the analysts’ forecast. Meanwhile the Polish Central Bank has this week lowered not only its inflation projection for the year but also its gross domestic product (GDP) forecasts – for this year and next. The inflation forecast is down to 0.1 per cent, from the 0.2 per cent recorded in July, and a long way from its 2.5% target.
Such low inflation of prices might seem like a positive when considering the employment problems and lack of wage growth in the ailing eurozone economy, but it puts the currency bloc uncomfortably close to outright deflation – a damaging cycle that can be difficult to escape. If prices will always be cheaper tomorrow, why ever spend anything? It’s hard to stimulate growth if no-one is spending, and that’s not to mention the depressive effect falling prices would have on wages.
What’s more, Poland’s economic recovery is in such sore need of a fillip that the central bank is eyeing a reduction of its interest rate – from the already-all-time-low two per cent to one per cent. That’s how badly they need to encourage spending and stir inflationary pressure.
In light of this persistent economic woe, it is evidently becoming difficult to convince not only Poland’s nationalists but the population at large that the projected route to further integration with the eurozone is a sound strategy. And the need for immigration could be a very tough sell indeed, with so little prosperity to spare right now.
Images: theverb.org [top image]; oanda.com (graph);