Europe is becoming increasingly impoverished, a political fortress with a stagnant economy
Interview with Tomasz Wróblewski, CEO of the Warsaw Enterprise Institute
Conducted by Sebastiano Giorgi
On Aleje Jerozolimskie 30, in the heart of bustling Warsaw, we met with Tomasz Wróblewski, the CEO of the Warsaw Enterprise Institute (WEI). A journalist who has written for publications such as “Newsweek Polska” and “Forbes Polska,” he began his professional career in the United States. After graduating from the University of Houston, he worked for “Newsweek” and “The Washington Post.” He was a correspondent for Radio Free Europe in Washington, and after 1989, for Polish independent media. He created, among other things, the Washington bureau of the RMF radio station. Upon returning to Poland, he was the program director of RMF radio, deputy editor-in-chief of “Wprost,” and later the editor-in-chief of “Newsweek Polska” and “Forbes,” as well as the vice president of the publishing group “Polskapresse.” Later, he became the editor-in-chief of “Dziennik Gazety Prawnej” and “Rzeczpospolita.” Currently, he is the CEO of one of the largest and most important freedom-oriented think tanks in Poland and Central-Eastern Europe.
The world is in a state of war – are the causes more ideological or economic?
Interest is always underpinned by ideology. For example, the Russian invasion of Ukraine is accompanied by a massive ideological apparatus that explains why Russia is doing this. And it is not unfounded – rejecting Putin’s conspiracy theories, there remains the conviction that Russia must govern Ukraine to remain the most important state in the region. Without Ukraine, Russia ceases to exist in Europe. It is not a European but an Asian country. In this war, economics and ideology mix because Putin’s historiographical interpretation of Ukraine’s historical ties to Russia emerges. Putin believes that a historical interpretation can change people’s sense of belonging, but it is not so. People feel Italian or Polish, or they feel Ukrainian and do not feel Russian. History does not matter. The same can be said about the war between Israel and Palestine, where ideology and religion play a huge role. Add to this the fact that in today’s world, there is a deep division largely stemming from the collapse of the so-called West, the breakdown of the Athenian-Judaistic-Christian value system that connected us for years, and the decline of Aristotle’s thought, which proclaimed that man thinks of the community as the most important frame of reference. Instead, we experience a breakdown into tribal individualism that divides states but also people based on affiliation: women, men, homosexuals, heterosexuals, and so on. The weakness of the West pushes other countries to exploit it. This is the so-called “perfect storm” phenomenon due to the number of problems that overlap at the same time. We are dealing with a demographic decline that makes us less efficient and productive, exacerbating economic decline, partly caused by an aging society. The older the society and the more social funds are needed, the greater the protectionism. The more protectionism grows, the weaker the economy becomes. Add to this ideologies that make people see no reason to die for Ukraine, Gaza, or Israel. All these elements come together
For many decades, Italy has been one of the most closely connected European countries with the United States. Has Poland now taken on that role?
For decades, Poland has always had a close connection with North America, dating back to the great emigration of the 19th century. Since then, everything good came to Poland from the USA: money from emigrant families, President Wilson’s guarantee of establishing an independent state for Poland after World War I, and, when under the yoke of Russia, hope for salvation in America. Idealization of America has always been present in Poland. However, the situation is changing. Pro-American sympathies are not as strong as they used to be, partly because the United States itself is changing. It is no longer the same country as in the 1960s and 1970s. America is divided, fragmented. It is true that in Poland, we are still attached to America and have illusions, but that is also changing. Meanwhile, President Macron, talking about building a Europe sovereign from America, understands the public sentiment. Twenty years ago, he wouldn’t have said this because no one would have taken him seriously. Today, America is, in a sense, “thrown out” of Europe. True, American troops still station here, but if you look at financial institutions, most investment banks have left Europe, not because they were kicked out, but because the market is overregulated. In Europe, for example, large American IT companies are seriously hindered by a wave of regulations, causing America to no longer see Europe as a place that can bring high profits. However, what do we get in return for this loss? In reality, there is no strong European community focused on a common idea. We have a few vague ideas about a united Europe. We still repeat phrases like “European tradition and identity,” but we don’t really know what that means, and above all, we can’t translate it into reality. Here’s an example – when a crisis erupts in one of the U.S. states, like a hurricane in Louisiana, aid from other states arrives the next day. But when floods and fires hit Greece, immediate financial aid from the European Union is not sent, and when Italy experiences a financial crisis, loans are offered, not joint support. European solidarity is an empty word.
Poland and Europe maintain complex relations, and it even seems that for Warsaw, Europe is merely an institution to seek support from rather than an ideal to actively participate in and contribute to.
The justification is that, fundamentally, we are still a country “catching up,” convinced that we always have to chase after other nations. I admit that Poland probably does not contribute as much to the European Union as it should, and even if there are ideas at the European level, they are not implemented. For years, we were told that we had to look at the large European countries and copy them. And so we did, copying everything from banking systems and restaurants to work ethics. Over time, we learn that not everything is worth emulating, or that perhaps it was at some point, but today we can do many things better.
However, in Poland, a country that did not exist on maps for over 120 years and then was under Soviet domination until 1989, there is still an “embedded” complex that reinforces the belief that everything good comes from abroad. This attitude is changing in Polish companies that acquire businesses from Germany or other countries, demonstrating that they can do business better. However, changing our mentality takes time.
Poland is more business-friendly than Italy.
We do not perceive Poland as economically favorable; on this scale, we are second to last, better only than Italy in terms of the quality of the tax system. The state’s involvement in the economy is very high. We have not been able to fully unleash this economic driving force. A good measure of this is the low number of Polish investments in Poland. It is foreigners who believe in the economy and opportunities of our country, not Poles who, after making profits in Poland, invest in homes in Italy and abroad because they consider the legal and tax system in Poland too unpredictable and unstable. This is a unique case: I do not know of any other country in the world where citizens are afraid to invest in their own country, unlike foreigners whose investments surpass domestic ones. I believe that the most business-friendly economies are those in which the state has the least say. Even in Sweden, the situation is better because it is a country where, although the economy is much more social, the state is far from business. Of course, one cannot deny that there are hard facts in favor of Poland: we have one of the highest rates of economic growth in Europe, strong exports despite the crisis in the West, and fantastic growth in prosperity. Prime Minister Morawiecki claims that in a short time, we can have a higher GDP per capita than the Italians, which, in my opinion, is more a result of Italy denying its prosperity. However, Poland is not fully utilizing its potential, and this is somewhat due to what we talked about earlier, namely the lack of vision, the perspective of a country capable of playing a leading role in the European and international arena.
There are two crucial issues that are on the agenda of every country: energy and immigration.
Energy will be a real problem in the coming years. The increasing electricity prices for businesses and households are becoming a growing concern. The government is addressing the issue by offering benefits to families and businesses, but it cannot do this indefinitely. Sooner or later, a crisis will come. At this moment, the only solution in the relatively short term seems to be nuclear energy. The topic of the energy revolution concerns the whole of Europe, and much is said about it, which made us think that we had found a solution. In reality, we have not fully transitioned to renewable energy sources. There are many ideas on how to eliminate the old energy model, but there is none on how to create a new one that will make businesses thrive. The energy revolution is often referred to as a technological revolution. However, this is not the case – every technological revolution has created more jobs and increased GDP. So far, all changes in the energy sector have created fewer jobs in the energy industry and businesses, resulting in more losses than benefits. Perhaps it will be beneficial for the climate in a hundred years – I wish this for my great-grandchildren – but for today, we have no idea how to solve the energy problem. It is a huge challenge, especially for the Polish government due to our dependence on coal.
As for immigration, there is much talk about it in Poland, but in reality, the problem does not exist because we do not have generous benefits for immigrants. An immigrant coming to Poland receives the same amount of money as an unemployed Pole, which is practically not enough to live on. Those who come to Poland counting on benefits go straight to other European countries. However, we have many immigrants who work. Few people know that we have around 100,000 Pakistanis and Hindus. We have Vietnamese and, of course, immigrants from Eastern Europe, Belarusians, and Ukrainians. They all work. The employment rate of foreigners is 84%, which is very high compared to 30 or 40% in other European countries. We look with horror at European solutions to the migration crisis, such as refugee camps. When the problem with Ukraine started, we met with Prime Minister Morawiecki and told him, ‘Whatever happens, let’s not open camps, let’s not gather people in one place. Let’s spread them throughout the country, let NGOs operate.’ I was in Greece, and I personally saw such a camp. I know that there are such camps in Italy as well. It is a tragedy for those in the camp and those living nearby. These are structures that attract criminal organizations. Our response to this problem is: if you cannot welcome someone into your home, do not let them into your country. And certainly, do not lock them up in a camp. Isolating people means you do not want to integrate them, so do not expect them to be part of your community when they leave the camp because they will harbor immense resentment
In the midst of this “perfect storm” — encompassing wars, energy issues, and global instability — are we in a moment of counter-globalization? Will supply chains undergo changes, and will the production of certain goods shift back to Europe?
The European Union originated as a coal and steel community, essentially a goods union. Since then, virtually nothing has changed. Today, two-thirds of the EU’s GDP is comprised of services, not coal and steel or goods. The Treaty on the Free Exchange of Services has not been ratified by the majority of countries. Consequently, we lack a single large financial portal like the United States. The largest e-commerce platform is Amazon, and the biggest film distributor in Europe is Netflix, not a European company. If you want to apply for a loan to buy a car or a house in Italy, you have to submit an application to an Italian bank. The same goes for Poland—apply to a Polish bank. You cannot search the offers of all European banks to get the best loan. Banks do not compete with each other. We talk a lot about market competition, but it doesn’t exist! Now, let’s look at Asia, where there is no political community, and each country—Vietnam, Cambodia, Indonesia, Malaysia—is separate. However, Asia has a community of services. It has free trade in services and goods. These are things not discussed in Europe and things we can only dream about. Recently, Indonesia scored much worse in all digital financial trade quality indicators. What did other Asian countries do—which often differ in religion, values, and politics—such as China? They invested in Indonesian banks to raise the quality of financial services and ensure Indonesian banks are on the same financial level as others. In Europe, no one would do that. We are not even allowed to do it unless through European institutions. If we consider any trade route, for example, France-Germany, we will see that the exchange of services between them is smaller than between Texas and Alaska. We say we are a community, but we are politically united, not economically. When Schumann and the founding fathers talked about creating a united Europe, they claimed people would unite when they had common interests. It’s true, but we did not create common interests; we only created a political community. Each European country can become an economic power if people are given freedom in this area, not intrusive regulations. What is the current situation? Companies that existed before the war still operate. When they go bankrupt—like German Opel—the government economically intervenes. It doesn’t let these companies collapse. This continuous rotation develops, making CEOs dependent on politicians, and politicians dependent on businessmen. This increases social frustration, leading to political movements such as the Five Star Movement in Italy, the National Rally in France, and something similar emerging in Poland. A sense of stagnation arises, prompting a reaction. So, what should be done? Withdraw subsidies, release companies from the grip of the state, and return everything to the market. Finally, tell ourselves the truth: Europe is becoming poorer compared to America and Asia, and soon we will have to catch up with India because they will prove to be richer than us. What do Polish and European politicians do when prosperity in Europe collapses? They start giving out more and more social benefits. At some point, most citizens will receive some social benefits. But where does this money come from? When Americans, Indians, or Chinese want to invest in Europe, they have to pay a high price for it. The last product sold by Europe is access to 440 million affluent citizens. For an internet company to enter the European market, it must be broken up, divided, taxed here and there, in all countries. Protectionism, international barriers—building a fortress, closing ourselves off, and talking about Europe’s sovereignty—are mental issues. We are sovereign. Is our lack of sovereignty due to the fact that Americans are richer and keep their army here to defend us? Is this a lack of sovereignty? They can leave. Will we become richer because of it? I doubt it. We may think we will be freer, but we certainly won’t be safer.
How can we change Europe for the better?
The first problem is that we are a political union rather than an economic one. We try to impose rules of living on people by force, instead of allowing these principles to emerge from within themselves. What did the Americans do that made the whole world want to emulate them? What made the world want to imitate the British in the past? The answer lies in their way of working and living, in the best and easiest manner. Therefore, we need to work on ourselves to create a wealthy and strong Europe: then, everyone will want to integrate with us. The crucial step is the depoliticization of the economy.