Growing, At Last

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The sliding dollar is good news for Poland. "We're the only ones not complaining," said Sikora, president of Poland's Bank Handlowy w Warszawie. Reason: Poland's external debt is in dollars, whereas most of its exports are in euros, which means it benefits coming and going. "We dream about this situation," Sikora said. Poland is the biggest of the 10 nations set to join the E.U. later this year, and Sikora is hopeful that accession will boost growth. Poland's lower labor costs give it a competitive edge, and it continues to enjoy some foreign direct investment, although the amount has dropped off in the past few years. A recent McKinsey report suggests that Poland is well placed to create as many as 500,000 jobs over the next five years by becoming a new center for outsourced services for European companies. Already Lufthansa and GE, among others, have moved some back-office operations to Poland.

Still, the transition to E.U. membership could be tough, as Poland has an 18% unemployment rate and an inefficient farming sector. The nation's finances are also deteriorating, with total debt creeping up toward 60% of GDP. Sikora said most Polish economists believe Poland should adopt the euro as soon as possible, perhaps by 2007. But he says that uncertainties about the Growth and Stability Pact may push that date back a couple of years.

There are plenty of uncertainties about economic growth and stability in the U.S. too. But the doubts are more for the long term and linked to the big deficits. For now, at least, the economy is humming again. "The optimism is more real," said Tyson. The question is whether that optimism will be enough to lift everyone else out of the doldrums.