With more than one million Ukrainian refugees crossing the border into Poland in the first few weeks of Russia’s invasion, Kraków, like many Polish cities, was soon overstretched and is now approaching full capacity. Bogusaw Kośmider, the city’s deputy mayor, tells fDi of the impact that the influx of refugees has had up until mid-March and why the Polish city may emerge as the ‘Vienna’ of the twenty-first century.

Q: What is the current situation in Kraków and how will this impact the balance sheets of cities in Poland?

A: Permanently, we are hosting 120,000–130,000 Ukrainian refugees. Before the war started, Krakow had 70,000–80,000 Ukrainian residents; now, we have around 200,000 Ukranians. This is a huge number. The city is at the end of its capacity.

In the short-term, this will have a huge impact on Kraków and other Polish cities. It will be a huge expenditure to service these refugees. This is an economic shock on a great level. The international community has been a great help and we’ve received a lot of gifts in the form of medicine, clothes — everything.

What is important to know is that of the 70,000 Ukranians in Kraków before the war, half of them worked in industries such as building and construction. Now, the situation is different as the refugees are mainly women and children and it’s difficult for female white-collar workers, like doctors, to work straight away in Poland with the need for documentation and so forth.

Q: What will the war do to the investment proposition of Kraków?

A: Until now, Kraków has been an exciting proposition for foreign investors, especially in call centres, outsourcing and real estate. Before the war, our real estate and rental incomes were also some of the highest in Poland.

It’s hard to speculate. Is the war going to change something? Sure. Now, Kraków could potentially become a meeting point between east and west, and not just as a humanitarian hub. During the Cold War, when Poland was a communist country on the other side of the Iron Curtain, Vienna was the cultural, political and business hub for both sides. We see that Kraków could take up this role.

This article first appeared in the April/May 2022 print edition of fDi Intelligence.