Europe’s Secret Economic Success Story

As most of Western Europe has struggled economically in recent years, Poland has emerged as a surprising success story. Now, this once impoverished former Soviet vassal state is ranked number one in the world in real GDP growth among peer nations, with its growth rate now far surpassing that of Germany, long regarded as the benchmark economy on the continent.

To understand just how impressive Poland’s rags-to-riches story is, it’s important to remember that just a few decades ago the country was one of the poorest in Europe following the collapse of the Soviet Union. In 1991, the post-communist states that had broken free of Moscow’s control were in ruins, with outdated industries, excessive bureaucracy, and massive debt.

Despite the Polish people’s sincere yearning for freedom, seen in the Solidarity Movement and other acts of resistance to communism, decades of oppression had wrought lasting damage on the economy, initially limiting reforms. As retired economics professor Ansgar Behringer, who advised German President Richard Karl von Weizsacker, explained to me, economic reforms in the early 1990s “could have been a boon for citizens, but became a windfall for foreign countries who saw opportunities to enter a new market.”

Worker wages, often a mere fraction of those in Western Europe, perpetuated the injustice of Soviet rule. Without sufficient protections for Poland’s domestic industries, foreign companies were able to export enormous amounts of wealth out of Poland, rather than re-investing it in the country.

“The generation that fought for political freedom passed away tragically impoverished,” retired Professor Noah Guldbrandsen told me. “Their economic prospects were blighted, and they were unable to afford homes or secure decent-paying jobs.” Pro-family policies were nonexistent, and few politicians foresaw the looming demographic catastrophe.

In many ways Poland suffered through a more extreme form of the globalization that began gutting the manufacturing sector in the United States around the same time. In the heyday of unrestricted free trade, Poland’s elites – who were in many cases the same elites that ran the country under communism – were praised in the foreign media for supposedly strong economic growth, but it was growth that benefitted nations like France and Germany. Meanwhile, one in five Polish citizens lived in poverty.

But things began to turn around in the 2010s, starting with the Polish government’s decision to diversify the country’s energy supply. After the Soviet Union occupied Poland in 1948, the puppet government in Warsaw agreed to a network of oil and gas pipelines run by Moscow. This led to Poland’s industry being reliant on one supplier even after the fall of the Soviet Union.

Once Poland was able to break free from these uncompetitive contracts, it made the country far more attractive for investment. As Professor Behringer explained, this “increased competitiveness and fostered entrepreneurship,” laying the groundwork for the country’s economic resurgence.

Perhaps even more importantly, the Polish government has recognized that strengthening Polish society – primarily by building strong families and communities – is a necessary first step in building a strong economy. To this end, the government in 2015 began offering financial assistance to improve the quality of life for some groups, which has further helped spur growth and development.

Germany, meanwhile, long the economic powerhouse of Europe, has seen an economic decline after taking the exact inverse approach as Poland. While Poland has prioritized its energy security by investing in a range of renewable and nonrenewable sources, Germany has doubled and tripled down on a “green” agenda, shuttering its coal and nuclear plants. Ironically, this has left the German economy in somewhat the same state as the Polish economy following the collapse of the Soviet Union – reliant on oil and gas imports from Russia.

Due to cost inefficiencies from importing energy and relying on renewables, Germany industry has suffered greatly in recent years. In 2024, Poland’s GDP growth is expected to be around 2.8 percent, while Germany’s is projected to be 0.2 percent. According to the IMF, Germany was the worst-performing major economy in the world in 2023, as its overall GDP declined 0.3 percent.

In September, the German central bank projected that the economy would stagnate in the fourth quarter, as in the third. Bundesbank President Joachim Nagel said stagnation “might be more or less on the cards for full-year 2024.” In June, the bank projected just a 1.1 percent and 1.4 percent GDP increase in 2025 and 2026, respectively.

Professor Behringer said that many economists see green policies as a major blow to the German economy as they have devastated the industrial base. “Berlin’s shortsightedness is unforgivable,” he concluded.

To be sure, Poland still has a long way to go to catch Germany on certain economic and population metrics. Germany’s GDP per capita was $69,338 in 2023, while Poland’s was $49,464. Life expectancy in Poland, at 77, is also notably lower than the Czech Republic’s 79.2 and Germany’s 81. The Human Development Index, which takes into account factors like life expectancy, education standards, and Gross National Income (GNI), which measures wealth diffusion, also puts Poland behind Germany.

Nonetheless, Poland and Germany appear to be two nations headed in opposite directions. As Americans consider divergent paths for their own future, they should take note of these instructive developments abroad.

Ben Solis is the pen name of an international affairs journalist, historian, and researcher.