in case of poland, the liberalization of the labour market and increased participation rate is badly needed. fiscal reforms must concentrate on rationalising the spending and not just increasing taxes. privatisation needs to be completed and it should include the banking sector. we have to strengthen competition in fuel and energy sectors. legal framework needs to be adjusted to be more efficient. the earlier deadline of the entry to the eu could act as a powerful motivating device to complete those reforms. i am a great believer in the deadlines and i think they help to achieve success. delaying the entry could do more harm then good, as it could weaken the incentive to complete the necessary and often politically costly reforms. eighth, flexibility of the rate of exchange is a poor substitute for structural reforms. ninth, i agree there is evident fear among the certain existing eu members, including germany, that once poland, hungary, slovakia or latvia enter the emu, the euro could be weaken. i do not find any rational argument supporting this preposition. firstly, as i pointed out, earlier date of entry would mobilise the candidate countries to complete the structural reforms. secondly, candidate countries combined make up for only around 6 % of the enlarged eu gdp. any negative impact the enlargement might have, which is unlikely, in any case will be highly subdued. thirdly, i think the reason behind the relative weakness of the euro, is not greece or portugal or the other emu members but something different. the entry of poland and other countries into the emu, assuming they complete reforms, will not weaken the euro at all. finally, as for today there are differences in the rate of inflation given the bs effect in the emu countries, hence why should be a problem for others, with inflation only marginally different from the eu average, to join the eurozone? tenth, earlier entry of the candidate countries into emu would allow them to start reaping the related advantages ( more price transparency, reduced transformation costs, stronger macroeconomic framework ) at the earlier date. summarising, we should not oppose nominal and real convergence. one should not assume there is an unavoidable conflict between the two. firstly, results of nominal convergence, a low inflation rate among them, are one of the foundations of the long - term economic growth. secondly, the great harmoniser between the real and nominal convergence are the structural reforms. the more reforms one has implemented, the less costly the disin

krzysztof rybinski : how to use globalization to improve poles ’ living standards? address by mr krzysztof rybinski, deputy president of the national bank of poland, at the panel session : globalization and poland ’ s development, 4th congress of the polish lisbon strategy forum, warsaw, 13 october 2006. * * * ladies and gentlemen, in my today's speech, i should like to achieve two goals : • first of all, i would like to outline major economic changes effected by globalization. 1 • second, i would like to point out to such areas in poland's economic strategy that call for profound changes necessary if we want to reap the benefits of globalization while avoiding its pitfalls. at the same time, i would like to emphasize, as i usually do, that the opinions presented in this speech reflect my personal views and by no means are an official stance taken by any institution i used to be or i am presently professionally involved with. * * * what major changes in the global economy and in national economies have been induced by globalization? globalization may be defined in various ways, and i believe that its essence is best captured when we define it as free movement of goods, services, labour, capital and knowledge between countries. before i proceed with the presentation of the most important effects of globalization, it is well worth recalling the demographic trends that are going to strongly influence the global economy. according to un estimates 2, by 2050 europe's population will have shrunk by more than 70 million, that is by around 10 %. in the same period, asia's and africa's population will have grown by 1, 300 million and more than one billion respectively. this means that we should expect a gradual shift in the centre of gravity of the economic activity from the us and europe to asia and africa. as a matter of fact, numerous estimates have shown that in 2050 the chinese economy will be 40 % larger than that of the us, while india's economy will be similar to the us in terms of gdp measured at purchasing power parity 3. these trends are also reflected in studies assessing what companies in developing markets will challenge the current global giants based mainly in the us, europe and japan. according to boston consulting group, the 100 ‘ global challengers ’ include 44 chinese, 21 indian and 12 brazilian companies. there are no polish companies on this list, even though it includes a few companies from egypt and turkey