ABSTRACT
The essence of the problem in the threatened eurozone countries is the loss of international competitiveness. In Spain, which until the outbreak of the global financial crisis performed better than Germany on the Maastricht criteria for deficits and public debt, the sole cause of the lack of competitiveness was an expansion in private indebtedness, which drove a building boom and wage growth. The threatened countries, finding themselves in the eurozone, couldn’t improve their competitiveness by adjusting their exchange rates, as they don’t have their own currencies. In 2007–2016, Poland achieved an improvement in its trade balance on a similar scale to the four southern eurozone countries. The 24% growth in domestic demand was the decisive factor in Poland’s gross domestic product (GDP) growth in that period. There was a drastic collapse of demand, which meant that despite a significant improvement in the trade balance, there was a deep reduction in GDP.
