"Brexit and the View from Poland: A Tale of Many Tales”

On November 15, 2017, Dr. Christopher A. Hartwell, President of CASE ­– Center for Social and Economic Research, participated in an international seminar organized by the University of Bath Institute for Policy Research, United Kingdom, where he discussed Poland's view on Brexit and the country's unique perspective on the European Union.

“A massive disruption in Britain is likely to have ripple effects in Central and Eastern Europe. If Eurozone integration continues at a faster speed without British roadblock, Poland can remain on the outside of the EU policymaking, what could hit Polish growth prospects,” said Dr. Hartwell in his speech.

He also commented on the possible results of Brexit on UK-EU trade relations. He underlined that it is still unknown what the tariff structure will be and there are concerns about non-tariff barriers (NTBs), especially SPS and standards. Also, immigration will affect the UK customers as well as labor market. He also noted, however, that from the industry perspective Brexit can offer some potential opportunities as well. For instance, Poles returning from the UK can augment Poland’s high-skilled workforce. Moreover, corporate tax rates in the UK may be lowered after Brexit, which could attract Polish firms.

Dr. Hartwell also gave his thoughts on the consequences of Brexit for Poland. “Poland is a massive recipient of EU structural funds. The loss of the UK, a huge net payer into the EU budget (€12 billion per annum) will hit Structural Funds starting in 2020. More interestingly, loss of the UK will bring down the average growth/GDP in the EU, meaning Poland will be closer to the ‘average’. Allocation of funds are more intense for poorer regions, and with Poland relatively less-poor, less money will flow to Warsaw,” he said.

He stressed, however, that this decrease in funds will not mean we should be worried about “Polexit”; according to the latest opinion polls 80 percent of Poles want to stay in the EU.

Another topic tackled during the seminar was post-Brexit relations between the EU and the UK and Russia. Dr. Hartwell pointed out that UK was a stalwart on sanctions on Russia, while French, German, and Italian businesses were continually trying to undermine and remove them. As a result, once the UK leaves the EU, Poland (and CEE) could be even more isolated in its stance towards Russia in the face of Franco-German-Italian alliance.

In conclusion of his speech, Dr. Hartwell underlined that effects of Brexit both on growth and trade were hard to foresee due to massive uncertainty of the outcome of divorce deal negotiations. Poland will however in his opinion maintain its cordial relationship with the UK, at least as long as the latter maintains its tough stance towards Russia. “Poland both loves and hates the EU but will likely try to be an intermediary for Brexit. Brexit will, on the whole, not be good for Poland.”

Photo: IPR, University of Bath