As people around Europe feel the financial wrath of governments slashing budgets in a desperate, and controversial, attempt to save money, one country in particular has decided to buck the trend and spend.
Poland will invest millions of pounds over the next few years on transforming its energy infrastructure, upgrading railways and adding miles of new tarmac to its still hopelessly inadequate road network.
While the likes of Greece and Portugal turn off the money supply, Poland has cracked open the piggy bank.
The reason for this was laid out by Donald Tusk, the Polish prime minister, in a recent speech. Perhaps aware of the mounting resentment to the word austerity and all its unfortunate implications, he said his government needed to invest to maintain growth. All told some £43 billion will be spent. A healthy economy, stated Mr Tusk, will protect the Polish people from “the consequences of the crisis”.
By far the biggest economy belonging to the EU’s fraternity of former Communist states, Poland has been something of a star performer over recent years. It, as ministers never tire of saying, was the only EU country to avoid recession back in 2008 and since then has clocked up remarkably healthy growth figures compared to those recorded by torpid EU states.
But the star has begun to wane of late. Instead of the growth of 4 per cent seen last year, this year’s figure will be around 2.3 per cent and 2013’s predicted at even less. Unemployment has crept up to 12.4 per cent, and many Poles still prefer to work abroad rather than stay home and wrestle with a struggling economy.
So, with hard times knocking on the door, the government has committed itself to keeping money flowing into the economy, although cynics and critics have argued that the desire to reach for the cheque book has more to do with boosting the government’s flagging popularity than improving the economy.
While the rejection of austerity marks one departure from the norm, the Polish government is also departing from its previous fixation of balancing the books and reducing its debt and deficit. Warsaw has spent many years trying to get them down with reasonable success, and as part of this effort, has ushered in unpopular measures such as raising the age of retirement.
Mr Tusk though has stressed that the spending will not place a strain on already stretched budgets. One way he plans to do this is by exploiting a legacy of Poland’s Communist past. It will set up an off-budget state investment fund worth some £8bn, backed by the biggest state bank and numerous companies still awaiting privatisation, despite Poland being a fully established member of the capitalism club for the past 22 years.
The fund, Mr Tusk hopes, will encourage the private sector to invest in Poland. Whether the spending will help avoid recession remains to be seen, but it is telling that, while much of Europe embraces the barbed policies of austerity one of its more successful countries has chosen to travel in another direction.
• Matthew Day reports on Eastern Europe for The Scotsman.