The Confidence Package and the only EU economy to avoid recession

As the global financial crisis spread in late 2008, confidence in Poland's banking sector wavered even though Polish banks held little direct exposure to the toxic assets at the center of the crisis. On 14 October 2008 the National Bank of Poland introduced what it called the Confidence Package, offering banks longer-term zloty funding, foreign-currency liquidity, and wider collateral for its operations, and on 6 November 2008 it arranged a 10 billion euro repo facility with the European Central Bank as a further backstop. Rather than defend the zloty, the NBP let it depreciate by roughly 40% against the euro by early 2009, a float that cushioned exporters and helped absorb the shock without the capital controls or currency pegs that proved so costly elsewhere in the region. The combination of that policy flexibility, a large domestic market, and continued bank lending, including a notable expansion by the state-controlled PKO BP even as foreign-owned banks pulled back, meant Poland's GDP still grew 1.6% in 2009 while the rest of the European Union contracted, making it the only EU economy to avoid recession that year.