WARSAW. APRIL 13. INTERFAX
C.NTRAL EUROPE - Infrastructure investment and economic growth in Poland would receive a major boost if the country wins its joint bid with Ukraine to host the 2012 European Football Championship, economists said Friday. It could also accelerate the adoption of the
euro.
"Poland would certainly be a net beneficiary of this event," said Ryszard Petru, Bank
BPH chief economist. "The experience of other countries shows there is a question of one-off investments but also investments in infrastructure, which Poland needs."
Poor infrastructure is seen as one of key elements holding back long-term economic development for the country, which is expected to show 7% year-on-year (y/y) growth in the first quarter of the year on the back of European Union financial support and a favorable international economic cycle.
According to Transport Minister Jerzy Polaczek, quoted in the Friday's edition of the daily Puls Biznesu, road refurbishment and construction, airport and railroad development could get a EUR 19 bln financial injection from European Union funds if it secures the Euro 2012 tournament.
Economists also said the responsibility of organizing Euro 2012 might mobilize Polish authorities to modify their sluggish attitude towards adoption of the single currency. They suggest a simultaneous adoption of the
euro and hosting the championship would bring additional financial benefits.
"I believe that this [the Euro 2012 organization] could motivate the government to adopt the
euro in 2012," said Jaroslaw Janecki, chief economist at Societe General. "In that case, we could see a better effect on the
euro-adoption."
Janecki pointed out that lack of currency exchange rate risk and exchange related costs will reinforce the country's attractiveness as an investment location and could attract higher number of tourists.
"If there is no currency exchange rate risk, why not to invest," said Janecki. "Also more tourists, football supporters could visit motivated by lack of currency exchange operation costs."
However, concern may well surface about the risk of inflationary pressures, should the Euro championship coincide with
euro-adoption in 2012.
According to Janecki, price increases are likely, while strong international competition should keep price tags on the ground.
"Of course some prices could increase, but it will be a result of rounding," said Janecki. "I would not fear any additional price gains [by joining Euro 2012 and
euro adoption events], as we see also the globalization effect."
To host the Euro 2012,
Poland and Ukraine are bidding against Italy and a joint submission from Hungary and Croatia. The European football authority UEFA is scheduled to announce its final decision on April 18.