So much for off-color ethnic jokes; Poland isn't key to Europe's future, it may be Europe's future.
SmartMoney's Jack Kough writes Poland's stock market is temptingly cheap. Sure, shares there have plunged 45% over the past year, versus declines of 35% in broader Europe and 3% in the U.S., as the free-floating Zloty has lost ground to both the euro and dollar over the past year. Hough also notes banks like Spain's Santander and Italy's UniCredit do brisk business in Poland, raising fears that a eurozone banking crisis could spread to Poland.
But Poland is in better shape than its stock prices suggest.
"This year, the Polish economy is expected to grow by 2.5%—slower than last year's 4.3%, but still the fastest rate in the 27-member European Union," Hough writes. "Last year, the country ran a budget deficit equal to 5.1% of gross domestic product, while America's deficit was 9% of GDP. This year, Poland's government expects to reduce its deficit to 3.5% of GDP."
