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How hard will Poland be hit by the economic crisis?


PolAmKrakow 1 | 434
3 Apr 2020 #61
@BritboyByd

LOL at stimulus package. I learned a long time ago, that real people buy real things. Owning a small business and staying in touch with people on the front lines of life will tell you more about the economy and markets than any economist or fund manager. The US stimulus package is a joke, and Poland's package isn't going to come close to whats needed for the people on the front lines.

While governments around the world are racing to save large corporations with bailouts, and access to funding, the real money behind every free market economy is with small business owners. Polish people should know this as well.

That said, a crash in value on PLN is unlikely. Though I am now buying as much as I can for when things level off. Making 7 to 10 percent just buying a currency is never a bad thing.

Have to agree with Cargo pants, there is no free lunch or easy deals in Poland. There are some nice deals out there but you have to look, and usually it helps to know someone. Again, comes from being on the ground and in touch with people on the front lines.

I thought I could come to Poland an make a killing two years ago. Took me about six months to figure out that I had to make a lot of friends before I could start making a killing. Same as everywhere else, your network will be invaluable. If you dont have one, you will pay for it here.
delphiandomine 85 | 18,266
3 Apr 2020 #62
Polish people should know this as well.

Unfortunately, they're their own worst enemy. They think that small business owners are far wealthier than they actually are.
PolAmKrakow 1 | 434
3 Apr 2020 #63
@delphiandomine

Wealth is relative. I had some wealthy friends in USA who are no longer wealthy after the stock markets tanked. Spoke to some friends in Real Estate there. Mortgages and refinance applications are in the toilet, and values coming down already.

How "credit" effect Poland will be interesting. I suspect, based on the number of "credit" company's everywhere working on bank commissions for obtaining loans for clients that there will be a lot more issues here than people expect. I see Poland very similarly as how I saw USA before 2008. Everything was great until disaster struck because no one was prepared for anything other than the success they had been experiencing.
BritboyByd 7 | 45
3 Apr 2020 #64
I get the impression that as a society, Poland is quite "credit thirsty". Their average wages are quite low internationally, but yet still demand westernized products like the latest Iphones etc. Shops give them this on 5 year 0% credit. There is a lot of debt floating about, with little means to pay it.
PolAmKrakow 1 | 434
3 Apr 2020 #65
@BritboyByd

Agreed. I think outstanding debt is being underestimated by most people except the government. Of note is the thee month non payment window established as one of the very first relief items. This coming after banks chimed in on what was going on. I suspect the banks clued the government in on what a disaster the credit market could become if there was no relief.

I have a friend in this credit business. Getting people 10 year loans for a BMW for instance when there is no way someone making 5000 pln per month should be buying a BMW. Getting people mortgages on property they will be able to pay for only if they are eating raman noodles for the next 20 years.

While this three month window will help, when jobs do not come back, what then? When the 2 million migrant Ukraine workers do not all come back to fill jobs, and rent apartments that were bought on mortgage, what then? When these developers are selling "investment", and "managed rental" properties, many of these owners are young and inexperienced business people trying to make a move in life. Great effort with really good execution until something like this happens. It will certainly be interesting to watch.
cms neuf - | 1,589
3 Apr 2020 #66
One thing that they do here is show ads for BMWs etc that say "Tylko 1700" and show the monthly rate followed by an asterisk, this kind of advertising should show the total cost more clearly.

On the whole however personal debt levels are far lower than in the UK, even taking into account the lower earnings - in Poland it's about 7.000 Euros per adult. In the UK over 30.000 pounds. Problem is that in the UK it's far easier to talk to the bank when you have problems.
BritboyByd 7 | 45
3 Apr 2020 #67
@cms neuf

So if a polish borrower gets into financial difficulty what can they do? Say I've just lost my job, debts to service, cant pay...where does it end?

I only know the UK system, and the person can go bankrupt and usually have their debts wiped out within 1 year.
delphiandomine 85 | 18,266
3 Apr 2020 #68
Everything was great until disaster struck because no one was prepared for anything other than the success they had been experiencing.

It's particularly the case for younger people, I think. A friend is a manager in a typical BPO/SSC type place, and they've just let go around half the people working there. Many of them have no real skills beyond generic "business" stuff, and it almost certainly means they'll be giving up their rental properties and returning to their smaller towns/villages.
Bratwurst Boy 6 | 10,590
3 Apr 2020 #69
Super interesting:

EU proposes short-time work scheme to avoid coronavirus lay-offs

rte.ie/news/business/2020/0401/1127856-commission-short-time-work-scheme/

That's real helpful stuff, that "Kurzarbeitergeld" helped Germany already through the financial crisis in 2008 and is being re-instated now again too....it would work well for the poorer EU members too!

It means workers get paid even as the companies they work for have to shut down for awhile during the crisis. Meaning they keep their jobs, and the companies can start again at full power once the crisis is over. Not to mention that the people can survive this time and have enough money to keep consuming, kick start the economy immediately afterwards again.

A large scale impoverishment and unemployment is avoided!

"The European Commision has proposed a short-time work scheme today, modelled on Germany's Kurzarbeit programme, to help people keep their jobs as the coronavirus pandemic hits economies across the 27-nation bloc.

"It is intended to help Italy, Spain and all other countries that have been hard hit. And it will do so thanks to the solidarity of other member states," she said. ...."

delphiandomine 85 | 18,266
3 Apr 2020 #70
Super interesting:

Linking it to the EU budget is *very* interesting. It gives Italy and Spain what they're begging for, yet it opens the door to linking it to the rule of law. A win-win.
mafketis 23 | 8,404
3 Apr 2020 #71
it would work well for the poorer EU members too!

"Leyen did not give details on how it would be funded"

"saying only it would be guaranteed by all EU countries"

by who?

A win-win.

I'll believe it when it happens...
Bratwurst Boy 6 | 10,590
3 Apr 2020 #72
A win-win.

And it would be soothing those Germans who are dead set against these "Coronabonds"!

"Kurzarbeitergeld" is something all here know and appreciate...it makes sense and has already proven to work.

Win-Win!!! :)

by who?

It's linked to the EU-Budget....and that is huge! It would be doable....at first about 100 Billion Euros!

If VdL can pull this through she would become the european Queen, better than Merkel heh:)

There is more on that here...sadly only in German:

faz.net/aktuell/wirtschaft/corona-wie-leyens-plan-fuer-kurzarbeitergeld-in-der-eu-aussieht-16707458.html

taz.de/Streit-ueber-Coronabonds/!5673379/
mafketis 23 | 8,404
3 Apr 2020 #73
It's linked to the EU-Budget..

It specifically says that there is "a clue"

To be clear, if this happens it would be very, very good, the best thing the EU has done in over 10 years. But as the old saying goes "many a slip twixt cup and lip"

Austerity (both at national and pan EU levels) needs to die as quickly as possible or the economic dislocations will be massive...
Bratwurst Boy 6 | 10,590
3 Apr 2020 #74
Austerity (both at national and pan EU levels) needs to die as quickly as possible

No, austerity is the reason people go looking to an austere Germany or Holland for money when they are in need. A Germany throwing out the money like others wouldn't have any money to help. We would all look like the South.

Your hostility against austerity is totally misguided and not understandable for me, sorry!

I don't want to live in a union which can't hold onto it's money...

To be clear, if this happens it would be very, very good, the best thing the EU has done in over 10 years.

Well....the planning has quite progressed. But as I understand it it still needs to be an unanimous decision...so it's now put to the members to say "yes" or "no".
mafketis 23 | 8,404
3 Apr 2020 #75
Your hostility against austerity is totally misguided and not understandable for me,

Listen to Mark Blyth - short story, austerity is a good idea in good times, but when hard times hit the government has to prime the pump, if the government cuts back when everybody else does the only accomplishment is to contract the entire economy. If everybody is holding on to every cent then the economy gets smaller not bigger...
Bratwurst Boy 6 | 10,590
3 Apr 2020 #76
- short story, austerity is a good idea in good times,

but when hard times hit the government has to prime the pump,

I agree with both actually! Especially if it's your own gov!

But that's not what you are talking about....you think Greece and now Italy, aren't you. And to force ANOTHER FAR AWAY COUNTRY to "prime the pump" for a foreign country is a totally different kind of fish.

You just can't just use these economical laws 1:1 in such a situation. Just one example...the greek pensioners had a higher pension than german seniors. To ask the poorer german pensioners to "prime the pump" for the richer greek pensioners is just inhuman!

To work like that...to use Blyth 1:1 the greek, italian, spanish and the german economy would need to be one...with the same economical government and oversight....we would need to be in a real union...but we don't have that!

So please leave up with your obsession about austerity concerning the EU members...we are far to different and by far not compatible enough for that!
mafketis 23 | 8,404
3 Apr 2020 #77
we would need to be in a real union...but we don't have that!......we are far to different

too bad nobody thought of that when they were planning the euro.... there's no way that the Greek (or Spanish or Italian) economy can be run the way the German economy is, to think that it can condemns the population to eternal poverty...
Bratwurst Boy 6 | 10,590
3 Apr 2020 #78
too bad nobody thought of that when they were planning the euro...

...or as they say, the Euro was a vision by politicians...not enough economical experts. It had alot of "birth defects"!

there's no way that the Greek (or Spanish or Italian) economy can be run the way the German economy is,

Why not? No change of progress and betterment? Are they cursed to be like that forever?
BritboyByd 7 | 45
3 Apr 2020 #79
Eu policies wont work, as it assumes business will go back to pre-vrius levels. It will in some instances, in others it will result in permanent job losses, business closure. Take pubs and restaurants, you can open them again, doesnt mean the customers will return.
Bratwurst Boy 6 | 10,590
3 Apr 2020 #80
Update:

The european wide "Kurzarbeitergeld" project has the name: "SURE".

It is meant for Italy, Spain and all by the Corona crisis especially hard hit EU members...

spiegel.de/wirtschaft/soziales/corona-krise-eu-kommission-plant-europaeisches-kurzarbeitermodell-a-051a513e-8a5d-4ed6-8d38-133223767c38

Knowing that now I googled for "SURE" and found that:

Questions and answers: Commission proposes SURE, a new temporary instrument worth up to €100 billion to help protect jobs and people in work

ec.europa.eu/commission/presscorner/detail/en/qanda_20_572

Lotsa info in there...in English! :)

...What are the next steps?

The Commission's proposal for a SURE instrument will need to be swiftly approved by the Council.

Now let's hope that they do so....swiftly!
mafketis 23 | 8,404
3 Apr 2020 #81
Why not?

Germany has a production/export economy (and a lot of exports within the EU)

Greece has a service economy with minimal production and very few exports... the euro is absolutely not designed for service economies....

No change of progress and betterment? Are they cursed to be like that forever?

Germany's been buying up assets in Greece... have they been building production? Where are they going to export to? Within the EU exports and imports sum out to zero - Greek gains mean German losses... Greek exports outside the EU would also be in direct competition to Germany...

Are they cursed to be like that forever?

Until there's a pull back of austerity and/or restructuring of the euro... yeah. There's literally no economic progress possible...
Bratwurst Boy 6 | 10,590
3 Apr 2020 #82
Greece has a service economy with minimal production and very few exports...

What "service economy"? Their mainstay had been shipping, with one if not the biggest flotillas in Europe if not the world!

...the Greek Merchant Navy controlled the world's largest merchant fleet....

en.wikipedia.org/wiki/Greek_shipping

They don't have a service economy...whom would they serve? With what? Decades of bad economical decisions and a near non-existent bureaucracy led to them having barely any economy at all by now.

Within the EU exports and imports sum out to zero - Greek gains mean German losses...

Oh please, not that bad old Krugman argument again!

Ever been on a real market? There you see stands besides stands and even more stands who all sell produce and fruits and what not...it's about quality and prices which gives customers the choice as it should be in a free market world. And mostly all stands earn their money!

It's not Germany's fault that Greece has been unable to come up with a say...dishwasher rivaling what Germany or Japan could put up in it's market stand. Just becauce Germany produces a dishwasher doesn't mean Greece can't do either! If it would be as good (or better) Greece would earn lotsa money, even when Germany also sells it's dishwasher!

And just think about the US...50 states in a real union....some states excell in dishwasher, some in produce...still, they have the same economical government and laws and oversight...and it works!

There's literally no economic progress possible

Is this something inborn in Southerners? Or what? Please explain, I can't follow you!
mafketis 23 | 8,404
3 Apr 2020 #83
What "service economy"? Their mainstay had been shipping,

Shipping is a service.... as is tourism (the only part of their economy that had been working and now that's dead...)

And just think about the US...50 states in a real union....

Without significant language or cultural differences (though those are growing and some form of secession is.... not regarded as impossible as it was even 10 years ago....)

And... it has transfers which Germany has specifically fought against...

The EU as a single real union is kind of a non-starter because of entrenched cultural and language differences... adopt a single official language and economic transfers for 50 years and get back to me
Bratwurst Boy 6 | 10,590
3 Apr 2020 #84
Shipping is a service....

Well...if you think so....I thought more along these lines:

.... is mostly concentrated in financial services, hospitality, retail, health, human services, information technology and education.

As for shipping you need to have (and to maintain) lotsa ships, which is expensive...which is more than jungling numbers on a computer in a bank! :)

And... it has transfers which Germany has specifically fought against...

...which we wouldn't and couldn't fight anymore if we had a real union! :)
(The same way rich California can't fight transfers to potatoe-land Iowa)

The EU as a single real union is kind of a non-starter because of entrenched cultural and language differences...

Well...the US didn't start out any better....the differences between the settlers had been as strong as at home....different languages, religions and cultures...there had been lots of hostilities and even wars....to grow to Americans needed lotsa time!

Even today, the Latinos and other minorities are growing and with them their cultures and languages....still....they want to be (mainly) Americans!

Shipping is a service.... as is tourism (the only part of their economy that had been working and now that's dead...)

And you can't blame that on the Germans....which have always been loyal tourists, loving spending their holiday-money in Greece. The country would be a lot worse off without it's german tourists!

Likewise the shipping...exporting Germany has no own merchant fleet to speak of and was always a bonafide customer of the greek shipping...no rivalries here!

Btw....it's not dead...it's alive and kicking:

Greece leads global merchant fleet

....In the report, UGS notes that Greece remains in the leading position during 2018, as it controls 20% of the global fleet in dwt tonnage.

safety4sea.com/greece-the-leader-in-global-merchant-fleet/
mafketis 23 | 8,404
3 Apr 2020 #85
you can't blame that on the Germans...

Did I?
mafketis 23 | 8,404
3 Apr 2020 #87
Well German economic influence on EU (and euro) economic policy is more negative than positive....
Bratwurst Boy 6 | 10,590
3 Apr 2020 #88
You keep repeating that, but when we discuss it I can always refute your arguments, even pinpoint mistakes and plain prejudices. Still you don't change your opinion in the slightest. You won't even try to see both sides!

I guess it's not really about economical facts with you....
mafketis 23 | 8,404
3 Apr 2020 #89
I can always refute your argument

No you don't, you just blame poor countries for being poor.

plain prejudice

Oh grow up, I don't dislike Germany (on the whole) I like the language and Germany does lots of things very well. But it's a world class elite economy tied to a bunch of second and third rate economies with very different economic systems and different economic interests. tha'ts not a recipe for mutual development at all...

What would happen if Japan entered a monetary union with the countries of SE Asia? How well would Japanese interests coincide with Thai economic interests? That's kind of the EU....
Bratwurst Boy 6 | 10,590
3 Apr 2020 #90
tha'ts not a recipe for mutual development at all...

Then how do you explain the greed for the Euro-membership in these "poor" countries?

I tell you why, a financial union with Germany offers these countries money to the same terms as Germany!

A country like Greece could never dream of getting so easy so much money.....because investors trust Germany. They trust it's government and it's economical policies....that makes new credits cheap. Greece for itself would get fresh money only much harder and much less to much higher interests, because investors don't trust it on it's own at all.

But now, in a financial union with Germany, Greece can borrow to it's hearts content, as the investors know it's being underfunded by Germany.

Hell, before the Euro-membership Greece used still donkeys on their dusty roads! Their main export had been cheap laborers.

Greece had all the possibilites in the world to do something worthwhile with all the money it suddenly got access to...that it ended like it did you can't blame on Germany but on stupid greek governmental decisions...totally democratic of course.

Imagine Berlin balking at that, forcing better, more sound, economical decisions from Athens....can you imagine the outcry? "Nazis" would had been the very least of them!

So, what do you blame Germany for exactly?


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