Yes, the EU told you on numerous occasions that you were being very, very naughty indeed by having such an unfairly low CT rate! I'm sure that had you all quaking :) It really doesn't take a genius to realise that the European HQ of an American or Japanese company is going to be in a country that actually has the Euro. From then on, it's logical to pick the one with the lowest taxes. You - quite cleverly and correctly in my opinion - got the best of both worlds. What exactly is your problem with this?
Of course being part of a single currency is an advantage, but no more than any other country who has it. For many companies, being in a high risk, unstable country was unacceptable. They understandably wouldn't want to go to a country where inflation rates could rise to 12 and 15 percent, so of course a single currency is always attractive. That doesnt take from the fact that other than having the euro, the EU hasnt been of any advantage to Irelands recent economic boom and we were in Europe a long time before. Location, education, our historical relationship with America, our initative to create low corporate taxation, structures in place to attract foreign business, goverment grants, construction industry, infrastructure and at the time competitiveness were responsible for Irelands economic boom, not the EU :) It doesnt take anyone with an iq that reaches double digits to realise that EU membership had very little to do with our ten year boom, nevermind a genius. I dont have any problem, but I appreciate your concern :)
Now I'm just confused. You've been telling me what a poor opinion the world markets have of Poland's economy due to the falling Zloty.
Its ok, I get confused sometimes also, too much aspartamine usually does it :) Ill split what i think is confusing you into two.
a,"The weakening PLN at the moment is caused ENTIRELY by a global capital flight to the USD due to problems in the whole emerging markets sector, not Poland specifically." You stated the obvious then imagined I or someone else claimed Poland was the cause....nobody claimed that
b,"You've been telling me what a poor opinion the world markets have of Poland's economy due to the falling Zloty" yes, I have said it isnt an attractive thing economically to attract inward investment.
You see . . a & b, two entirely different points, just because other countries may thread cautiously if Polands currency free falls, it doesnt mean anybody thinks it is Polands fault :) Most of this thread concerns how the rest of the world and the credit crisis, recession, stock markets affects the zloty :) When a country imports goods, how does it pay for them? You got it, with its own currency. It supplies currency and demands product....wait. Not quite that simple. If you are a Chinese company, you want to be paid in yuan. So when a US company buys your goods, it needs to take its dollars, exchange them for yuan, and complete the purchase. So now you see, when a country imports goods, it supplies its currency and demands another. Exports are the reverse. There you have it, exports increase the value of a domestic currency, and imports decrease it. So when the rest of the world is in recession, and your neighbours hungary, germany etc are having problems, thus your currency will fall :) simple !
What I meant was that 1) Germany is a big contributor to the EU 2) The EU has promised to spend money in Poland and won't reneg just because Germany is in recession. Outsourcing doesn't come into it. All I said about outsourcing is that Poland's economy is too domestically driven to be that dependent on it.
Yes, I do own (high end) off plan property, have made a fair bit on one and am probably flat on the other. Maybe their values will drop a little in the coming year. I've got no problem with that as I'm thinking long term. The point I've been trying to make all along is that Poland has no inherent STRUCTURAL weaknesses (such as a collapsed credit market). Almost anywhere else in the world is in worse shape.
Yes, germany is very big contributor to the EU as its largest economy, as are all the billions from the other countries in recession. Nobody here claimed that Germanys recession means that they will suddenly stop contributing to the EU, just as Ireland wont :) It doesnt seem relevant to the discussion.
Polands growth was driven in the last few years by a 6.3 percent rise in domestic demand as falling unemployment and rising wages encourage Poles to boost spending. This in turn has spurred a 15.7 percent jump in investments as local companies scrambled to expand their output, however this is all relatively short term and cant sustain itself through turbulent times such as these. While no economy is completely dependent on foreign investment and outsourcing it is a massive injection of monetary value to any economy, thus why Poland is so keen to copy Irelands blueprint.
I agree Poland does have a pretty good 'spine' for want of a better word, to support itself through these turbulent times, but it wont be enough to prevent a few ribs been broken :) Thanks mostly to Polish banks traditionaly being tight with money, is the reason they havent got into too much trouble. Although if this crisis hadnt happened Poland would have been a lot worse, unimaginably worse as they were going down the same road offering easy credit which would have had them borrowing from other banks and gambling more of peoples money on the markets. As you are looking at the long term you should be fine, but a lot arent in that situation and cant stick through it. If I could, I would buy up houses in ireland and elsewhere when they bottom out and leave them there for 15 yrs to reap the rewards . . . but I or few others can afford to do that so for most its about being able to afford a home, quality of lifestyle after debt and worrying about how much negative equity they are sitting in. Some guess prices will fall in Poland next year, and in 2110, then raise by 10% in the following two years . . but like everything else in housing, its all guesses by people who tell you what you want to hear :)
I'll put my money where my mouth is.
Prepared to bet one pair of tickets to a game in Warsaw's new stadium in 2012.
- average transaction price for a flat in Warsaw will be lower
- average transaction price for a flat in Krakow will be lower
- average prime rent per sqm for a mid range shopping centre (say Arkadia ?) will be lower.
Don't know about office space but think probably around the same level as it is currently.
Now there is a man that does put his money where his mouth is, but its a stupid man / woman that would take that bet :)