Poland: More worried about Europe than Russia

With Russia and Ukraine for neighbors, Poland's economy is feeling the heat from the geopolitical crisis but government officials insist the country was a bright spot in a bad neighborhood and that the euro zone was more of a concern than Russia.

"Sanctions are felt across the board, exports to Ukraine are down 25 percent and to Russia they're down 10 percent," Krzysztof Rybinski, the former deputy governor of the Polish Central Bank, told CNBC Friday.

"But I don't think investors will pull the plug on Poland unless Russia does something really unpredictable."

For Poland the euro zone slowdown was more of a worry. "For the Polish economy it's much more important what happens in the west, if there is no growth, stagnation and recession in the west it will take us down with the situation. Russia and Ukraine together are only about 7.5 percent of Polish exports – that's significant but not as much as (our exports to) Germany."

Sanctions in Russia and the conflict in Ukraine, coupled with sluggish growth in the euro zone have had a "chilling" effect on Central Eastern Europe, with Poland no exception.

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Despite credit rating agency Moody's saying that Poland's economy had shown "resilience in times of stress" the country's gross domestic product has declined. The economy grew by 2.0 percent in 2012, but grew 1.6 percent last year, according to EU statistics service Eurostat.

Rybinski said there had been some positive effects of the sanctions on Russia, however.

"We have many Ukrainian young people flowing through the border to Polish universities, this is a positive effect of sanctions. Other positive effects are that the zloty (the Polish currency) is not very strong which is helping Polish exporters," he said.

Read MoreEastern Europe battles 'Wild West' image

"We don't see any dramatic outflows of any type of investment. On the contrary, we have many companies opening new investments here. Investors are starting to perceive Poland as a stable country judged by the level of interest rates on Polish debt which is very, very low -- despite the fact that the Russian/Ukrainian situation is worsening."

Poland's relationship with Russia has come under close scrutiny recently after Radoslaw Sikorski, former foreign minister of Poland, said in a news interview that in 2008, President Vladimir Putin had suggested to Poland's then Prime Minister, Donald Tusk, that they should divide Ukraine between them and had requested Poland to put troops into Ukraine.

Speaking to CNBC, however, Sikorski said the remarks had been "explained away as an unfortunate anecdote" and denied that the conversation between Putin and Tusk had ever taken place, saying "there is no point spreading gossip."

He did say that the country was following events in Russia and Ukraine very closely, however, and that Russia needed to return to "the world of rules."

"Poland will be the first to encourage and welcome Russia back to the world of rules if Russia stops annexing other people's territory. But really that is the cause of the current crisis."

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