Poland has recently ascended into the global spotlight as it
co-hosts Euro 2012, the European soccer championships. The right to
host this tournament is essentially the culmination of a remarkable
transformation the Polish economy (
PLND
,
quote
) has undergone since it embraced capitalism.
[caption id="attachment_63900" align="alignright" width="300"
caption="Euro 2012 shows just how far the Polish economy has come"]
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For decades, the Polish economy languished under the restrictive
grip of communism. As a Soviet satellite state, Poland had little
choice but to pursue economic policies that rendered the Polish
economy feckless.
However, starting with Lech Walesa's Solidarity Movement, an
independent movement catalyzed, allowing Poles to begin a path
towards freedom from oppressive economic policy.
Poland's metamorphosis from struggling post-communist regime to
dynamic Eastern European economy did not materialize overnight.
Arguably the most important step in the rise of the Polish economy
was their admittance into the European Union.
At the time, the Polish economy was heavily dependent on
agriculture. By joining the European Union, Poland was able to
benefit from Europe's Common Agricultural Policy that netted the
country billions in subsidies, as well as the natural benefits of a
trade union for a country with a cheaper currency than most of its
peers.
As a result of these favorable conditions, the Polish economy
became a cheap labor destination for a number of European firms. As
a result, the Polish economy has moved away from agriculture and
towards industry and services, with the latter two now constituting
95% of Poland's GDP.
Since joining the European Union, Poland's economy has grown at
a brisk pace. The government has also managed the economy
admirably; in fact, Poland was able to avoid recession during the
recent global financial crisis.
Investors looking for access to the Polish economy can do so
through the Market Vectors Poland ETF PLND. Although largely
exposed to the financial sector,
Eastern Europe's banks appear to be in much better
shape
than their Western European counterparts.
Other
heavily weighted sectors include
basic materials, utilities, and energy.
While definitely exposed to the euro zone crisis, the Polish
economy is
well-positioned to take advantage of a rebound in
growth in Europe
.
