The Republic of Poland (Rzeczpospolita Polska) is one of the largest countries in Central Europe. It borders Russia, Lithuania, Belarus, Ukraine, Slovakia, the Czech Republic and Germany. Its northern frontier on the Baltic Sea gives it easy access to Scandinavian and North Sea ports. The capital of Poland, Warsaw, is situated in the centre of the country. Poland ranks eighth in Europe in terms of size with a surface area of 312,677 sq. km, which constitutes about 3% of the continent's surface. The country lies almost wholly on the North European Plain and is a land of gentle slopes, rarely rising above 300 m, except along the southern border with the Sudetic and Carpathian Mountain ranges. Rysy, the highest mountain peak rises 2499 m above sea level. Approximately one-fifth of the land is maintained as pasture and meadows. Forests cover over 28% of the total area. The longest rivers cross the country northwards: the Vistula (1074 km in length) in the centre, and the Odra (854 km), which flows along Poland's Western border.

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In recent years the population of Poland, currently 38.7 million people, has been experiencing very slow growth. However, in 1999 for the first time in the post-war period a slight decline in the population was noted. In 2000 this trend continued, as the population of Poland declined by 0.02%. Approximately 62% of Poles live in 880 cities, which are mostly small or medium-sized, and half the population lives in 42 cities with a population of over 100,000 inhabitants. Warsaw, the capital and Poland's largest city has a population of 1.6 million people. Apart from the capital, the Polish largest cities are Lódz, Cracow, Wroclaw, Poznan and the Gdansk-Sopot-Gdynia conurbation, which together account for about 3.6 million people. With respect to size of population, Poland ranks 8th in Europe and 29th in the world, with an average population density of 124 persons per km2. The population of Polish communities abroad is estimated at 12 million, with the largest communities living in the USA (5.6 million), Commonwealth of the Independent States - CIS (2.5 million), France (1 million), Germany (0.8 million), Canada (0.4 million), Brazil (0.2 million), Australia (0.15) and the UK (0.14).

From the ethnic point of view, Poland is one of the most homogeneous countries in Europe, with over 98% of the population being of Polish ethnic origin. In the business community, as well as among young people, English is the most popular foreign language. Further, reflecting the geographical position of the country, German and Russian are frequently spoken.

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Poland was the first country in Central and Eastern Europe to break out of communist rule. This bold move was soon followed throughout the region. It all started early in 1989 with discussions between the communist-dominated authorities and the opposition, which became known as the "Round Table Negotiations". As a result, major agreements were reached, including legalisation of the "Solidarity" trade union and an agreement to hold elections on 4 June 1989, which were won by the representatives of "Solidarity" who formed the first non-communist government since the Second World War. Poland is a republic adopting a mixture of parliamentary and presidential models. In 1997 a new Constitution was adopted by the National Assembly and submitted for ratification in a national referendum. The new Constitution contains some important guarantees for business. It states that the Republic of Poland assures freedom of economic activities and any limitation of this freedom should be based on law.

On the other hand, constitutional regulations concerning public finance protect business against unfair and overburdening fiscal charges. For instance, the constitution says that fiscal charges may be imposed only by law and should not be excessively high. Another important safeguard clause says that an increase of expenditure by the government should not cause an increase of the budget deficit above the level set by the budgetary law, and that the budgetary law should not provide for the financing of the deficit through lending from the central bank.

The President is elected to office by general election for a 5-year term. He appoints candidates for the post of Prime Minister and has the right to veto acts passed by Parliament. His veto may be rejected by some two-thirds majority in the Sejm. The President is the Head of State and the Commander-in-Chief of the military forces. He has the right to dissolve Parliament if it is unable to approve the budget law or to form a government. Lech Walesa, the historic leader of the Solidarity movement was elected President in November 1990. However, in a heated presidential campaign in the autumn of 1995 he lost to Mr. Aleksander Kwasniewski. Legislative authority is vested in the Parliament or National Assembly composed of two Chambers: the lower house, the Sejm with 460 seats and the upper house, the Senate with 100 seats, both elected for a 4-year term. The Sejm has 460 deputies elected through a proportional voting system. All 100 senators are elected in a majority voting system. The Senate does not initiate laws but reviews and proposes amendments to acts passed by the Sejm. However, ultimately it is the Sejm that decides on the final version of any legislative act.

Executive powers are vested in the Prime Minister and his Cabinet, called the Council of Ministers, while judicial power is vested in independent courts. As of the outset of political and economic transformation process Poland focused its efforts on two major goals: economic integration with the European Community (see Chapter VI) and NATO membership. The economic integration process, described further in Chapter VI, aims at re-establishing Poland in the European economy and at acquiring EC membership in the shortest time possible. NATO membership, ensuring external security, has already been achieved on 12th March 1999.

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