Since the fall of the Iron Curtain, Poland has refashioned itself as a model of free-market economics. From 1989 to 2007 its economy grew 177 percent, outpacing its Central and Eastern European neighbors as it nearly tripled in size—the result of a series of aggressive measures taken by the government after the collapse of communism. Price controls were lifted, government wages were capped, trade was liberalized, and the Polish currency, the zloty, was made convertible. The policies left millions out of work but freed Poland to begin to recover from decades of mismanagement. The economy got a further boost with the country’s entry into the EU in 2004.
At the onset of the global financial crisis, Poland’s burden of public debt was below 50 percent of GDP, low compared with many European countries—in part the result of a clause in its 1997 constitution limiting government borrowing to 60 percent of GDP. Individual and corporate debt was relatively restrained, kept in check by strict financial regulation and a cultural aversion to borrowing. “Which countries suffered the biggest busts?” says Leszek Balcerowicz, an economist and former deputy prime minister who was the architect for the country’s most important reforms. “Those that previously had the booms. One of the main reasons why we did not suffer a recession is because we didn’t allow the boom to develop.”