Failure to make progress in these areas may sizably reduce the economic growth in the years to come. These areas include, but are by no means limited to road infrastructure, volume and quality of spending on research and development or business environment in Poland, as can be exemplified by an average of three years that it takes to claim one’s rights before courts in disputes between business entities. These weaknesses of the Polish economy are well known and it is also common knowledge what should be done to eliminate them. It is however not the weaknesses that I intend to discuss today, as I believe that there are other and much more serious areas of concern that significantly reduce Poland’s economic potential. Lack of reform in these areas may deprive Poland of the benefits brought by globalization. Today, I would like to outline two such problems: •  First, for many years there has been no common vision of Poland and no leadership that could inspire Poles to pursue this vision. •  Second, we may boast our world’s best IT specialists, but we are still well backward in terms of e-government – according to the Capgemini survey from June 2006 Poland ranks third from the bottom in the European Union 10 . Why do I believe the lack of vision, lack of leadership and Poland’s backwardness in e-government to be major weaknesses that diminish Poland’s possibility to capture the opportunities offered by the global economy?
Let me expand a little on these vulnerabilities: Repeated downward revisions to the economic outlook and accommodative monetary policy actions on both sides of the Atlantic have put downward pressure on global bond yields across the whole maturity spectrum. For the first time in history, large parts of the yield curve for many euro area sovereign bonds, in particular those issued by governments with high credit ratings, have entered negative territory. It is often said that low or negative interest rates inflate asset prices as investors search for yield and take on more credit and duration risk. Equity and corporate bond prices, for instance, have appreciated across the globe over the past decade as yields have followed a path of long-term decline. Abrupt corrections, especially in equity markets and markets for lower-rated bonds remain a risk, particularly in the face of high economic and political uncertainty. Low funding costs can encourage firms to increase their leverage, which might intensify vulnerabilities in the event of an economic downturn. This risk has increased as the economic outlook has worsened and the share of triple-B ratings has grown. Concerning the second vulnerability, in several countries debt in the public and/or nonfinancial private sectors is lingering at levels that are high by historical and international standards. This leaves public and private finances exposed to the risk of a sudden change in market sentiment or deteriorating macroeconomic conditions. Third, parts of the banking sector continue to exhibit weak performance.