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Polish-Czech Cooperation Forum - the Challenges and Impediments

The boom in the economic relations between Poland and the Czech Republic that continues despite unfavourable macroeconomic conditions, requires actions in order to maintain the trend, advantageous for both countries. Polish-Czech cooperation may have an important impact on the economic development in Central-Eastern Europe. The Czech Republic-Poland Economic Forum, co-organised by PTWP Group, has just ended in Warsaw.

Last year was a good time in the Polish-Czech economic cooperation - said the President of the Republic of Poland, Bronisław Komorowski, inaugurating the Czech Republic-Poland Economic Forum. - Our trade is flourishing despite the fact that both our countries have been influenced by the world crisis. Last year our trade figures increased by 16 per cent. Such is the scale of our mutual success.
- Our trade volume in the first seven months of 2012 was bigger than in the entire 2006, in the pre-recession times. My visit to Poland should be seen as a signal to deepen the cooperation between our two countries - said the President of the Czech Republic, Vaclav Klaus.
– As many as 9000 Czech companies are involved in the economic cooperation with Poland, which reflects its volume and scope - said the Czech Minister of Industry and Trade Martin Kuba. - It is a stable and natural environment.

Expansion and cooperation
According to Waldemar Pawlak, the Polish Deputy Prime Minister and the Minister of the Economy, companies from both countries fare better in unfavourable conditions using their skill to combine unconventional actions with law-abiding. It is evident in the strong cooperation of companies, particularly from southern Poland and Czech Republic, whose offer continues to be competitive.

- After a period of fascination with the economic ties with West European countries, we are beginning to notice the neighbouring markets and to make up for the backlog -said Sławomir Majman, the President of the Polish Agency of Information and Foreign Investmen. - It is true that we compete in our efforts to attract foreign investment, but we should remember that investors tend to see Central-Eastern Europe as an entity. The more we all do to improve the general image of the region, the better for both Poland and the Czech Republic.
Common promotional campaigns on distant markets have been considered an interesting area of Polish-Czech cooperation. In Southeast Asia, South America or Africa the region of 200 million consumers has to present a common and coherent offer.

According to Mr Pawlak another important factor is the capital engagement of companies from both countries. The presence of CEZ in Poland, and of Orlen in the Czech Repulic is a good example. The Polish capital, what has been stressed during the Forum, is increasingly looking for opportunities outside of its home market - mainly in the countries that are close in terms of both distance and culture. As many as 18 per cent of Polish companies manufacture goods outside of the country, and 34 per cent are planning their expansion. Polish investments in the Czech Republic exceeded 2.5 billion Euro and are growing. The Czech Republic is the third or the fourth (according to different sources) recipient of Polish investments.

- It is very important to develop cooperation between the companies from both countries. As a result, our products will be exported, while jobs will remain in the country - urged Mr Pawlak.

Nothing is easy
The participants of the debate did not avoid difficult subjects. They discussed the impediments to the development of business and economic cooperation, such as fiscal regulations, decreasing demand, differences in structures of home markets in Poland and the Czech Republic, and the threats resulting from the climate and energy policy of the European Union.

The Czech guests stated the fact that the regulations pertaining to the climate and energy policy that is being implemented in the EU with a strong consequence, are not the best solution from the perspective of both our economies. They stressed that this opinion signals an opportunity for an area of both countries' potential collaboration at the European forum.

Tomas David, the director of the energy development sector in EPH, a company investing in coal mining and energy generation (also in Poland), urged for mutual efforts, both at the domestic and European forum, to achieve stable conditions for investment in power industry.

Jacek Krawiec, President and Chief Executive Officer of PKN Orlen, called for improvement of the operating conditions in the Czech Republic. In the face of the global recession the demand for the oil refining industry products is decreasing. Since 2009 its capacity decreased by 20 per cent.

Common nuclear energy
Kamil Cermak, General Director of CEZ Polska, reminded the participants that Poland faces a major challenge of building the nuclear energy industry from the ground up. The Czech Republic is planning construction of new units in the nuclear plant in Temelin, which, as opposed to Poland, is accompanied by a high level of social approval.

- We have the experience and the know-how that we can share - declared Cermak. – We believe in the future of nuclear energy both in Poland and in the Czech Republic, and we know how great an effort is necessary.
The development of the nuclear energy sector is in profound interest of both countries, he stressed, and its future should be determined by the businessmen and politicians in both countries, and not in Brussels.
- We will use the experience of our Czech partner in persuading the public opinion, not only in Poland, but also in the neighbouring countries, that the development of nuclear energy sector is rational - said Aleksander Grad, the president of PGE Energia Jądrowa.

Priority to infrastructure
Investments in infrastructural networks, including gas and power grids, are crucial for further development of Polish-Czech - and wider Central-European - economic cooperation.
- Common, Polish-Czech infrastructural projects should become a part of the Pan-European North-South systems - proposed the Polish President. - It is a big chance for both our countries.

Grzegorz Tomasik, Member of the Board of PSE Operator SA, discussed the problems for the existing power grid infrastructure in Poland and in the Czech Republic, resulting from the European structure of energy sources (among others, the dynamic development of renewable sources of energy in Germany). The improvement of the trans-European power flows requires specialised investment, and, in future, closer cooperation in the region.
Part of the debate about infrastructure was devoted to road and railway projects.
What is done fast, is not always optimal, since it adversely affects the costs and the quality - commented Josef Krysl, the President of the Board of Bogl a Krysl, not trying to conceal bad experiences with the Polish market.
- The weakest point in the road investments in Poland is the design and communication with road designers. The prices are often unrealistic, which has a negative impact on the market. We would like to continue our operations in Poland, but on healthier terms.
- The biggest added value of this debate is, that the problems mentioned by Mr Krysl should not repeat in the next projects - said Lech Witecki, acting director of the General Directorate for National Roads and Motorways. - But it is always important to ask a question whether the partners with whom we enter into cooperation, have the necessary potential.

The motif of the crisis, as reflected in different ways in the economic reality of both countries, was naturally evident in all the discussed subjects, serving rather as an aspect motivating both parties of the Polish-Czech relations than an excuse to complain.

President Vaclav Klaus stressed the fact that the Czechs keep a close eye on how Polish economy is tackling the crisis.
- We have been hit by it on a bigger scale than Poland, but both our countries draw strength from the fact that they have their own currencies, and therefore the tools of economic policy - remarked the Czech President. - Poland and the Czech Republic should vocally and clearly formulate their common stance and support each other on the European scene.