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Poland's economy bests its neighors'

Poland avoided recession in 2009 and forecasts growth for 2010.

Poland's growth at a time of general stagnation has pushed its economy ahead of that of the Netherlands, which means Poland now has the sixth largest economy in the European Union, commensurate with its position as the sixth most populous country in the EU.

The startling economic performance in 2009 gave a big boost to the government. Rostowski and Tusk held news conferences where the rest of Europe was shown as a sea of recession red, with Poland the lone green island of economic growth.

The unexpected resilience of the economy was due mainly to private business, which proved able to take the downturn in its stride.

A symbol of its resilience could be seen in Leszek Czarnecki, one of Poland's richest men, who was facing a crisis a year ago. His property development company, LC Corp., halted construction on an ambitious project to build one of the country's tallest skyscrapers in the western city of Wroclaw.

Meanwhile, Czarnecki's bank, Getin Bank, was facing huge troubles because it had been one of the most aggressive lenders in foreign currency denominated loans — mostly in Swiss francs — to Poles eager to get in on a booming real estate market. That model collapsed after the fall of Lehman Brothers in September 2008, which froze access to international credit markets and forced Polish banks to restrict lending.

But by the summer of 2009, crews were back on the job in Wroclaw, and Czarnecki's bank had survived the credit squeeze. Getin Bank now lends almost only in Polish zlotys, but Czarnecki's banking group has managed to turn a 230 million zlotys ($82 million) profit in the first three quarters of the year — a decent result albeit a fall from the 443 million zlotys ($158 million) it made in the same period a year ago — before the crisis hit.

“Poland didn’t have a crisis, what we had was a slowdown in growth,” said Czarnecki.

The trick for the government in the coming year will be to ensure that the higher spending caused by the slowdown does not throw public finances into a crisis. The budget deficit is growing quickly and public debt could cross 55 percent of GDP, the level at which the law calls for measures to bring spending back under control — something that will be difficult to do in a year when Tusk is expected to run for president.

But compared to the gloomy year in store for Ireland, Spain, Greece and the Baltic countries, Poland's problems are much smaller in scale.

“A year after the height of the crisis, the same politicians and economists who then predicted a complete economic collapse, are now winding up a new spiral of fear,” Rostowski wrote in a Christmas letter to the Gazeta Wyborcza newspaper. “Unfortunately, they are again ignoring hard data, which places Poland in the group of countries with a relatively safe level of debt.”