Poland: Boring, with the hints of madness

[Martinus]

The Polish government
Tusk in time
Poland's politics is stable at last. That is good—but no excuse for complacency
Apr 28th 2011 | LONDON AND WARSAW | from the print edition


DONALD TUSK is an emollient figure in a quarrelsome country. This formula works for the Polish prime minister. His government, elected in 2007, will serve out a full term, a rarity in a fractious and factious place. He is heading for victory in a general election in October, either with his coalition partner, the rural People's Party, or with the ex-communist Democratic Left. A Polish prime minister winning reelection would be an historic first.

Stability marks a dramatic shift. Since 1989 politics has mostly featured fast changes and high drama. Dodgy populists who hogged the headlines have vanished. Mainstream parties once changed names, merged and split with bewildering speed. Now Mr Tusk's Civic Platform is a political fixture. So is Law and Justice, the main opposition party, led by Jaroslaw Kaczynski.

Part of Mr Tusk's success stems from his rival's failings. Mr Kaczynski seems fixated by last April's plane crash in Smolensk, which killed his twin Lech, Poland's president, along with scores of senior officials. Rows over memorials and commemorations, laced with conspiracy theories (Mr Kaczynski hints at foul play and a cover-up) enthuse some voters, but bemuse or repel others. If he loses in October, Mr Kaczynski may go. A new leader who junked his wild talk might offer stronger conservative competition for Mr Tusk.

But not yet. Consumed by peripheral issues, the opposition has largely failed to attack the government's weak points. One is the overlap between party funding and business. Mr Tusk takes a tough line at the top (eg, in a lobbying scandal over a gambling law); but at the grassroots things are murkier. A second is Poland's dire infrastructure. Despite a big road-building programme, mostly paid for by the European Union, Polish roads are among the worst in the EU: 35 people died on them over Easter.

Mr Tusk's foreign-policy record is somewhat mixed. Relations with Germany have warmed. America's Barack Obama will visit Warsaw next month. But Poland has been irksomely hesitant over Libya. This is odd for a country that had promoted common European defence and security as a priority for its forthcoming six-month presidency of the EU.

Poland continues to champion Ukraine. But an attempt to engage Belarus collapsed after the regime's crackdown in December. Better relations with Russia have stopped anti-Polish propaganda there and boosted trade. But even Mr Tusk says that the main result is just to "remove drama" from bilateral ties. A Russian report on the Smolensk plane crash was slow, slovenly and one-sided. Meanwhile a squabble with Lithuania has annoyed neighbours that would prefer to see Poland as a leader, not a score-settler. Asked to list successes, officials point hesitantly to the recent help that Poland has given to Moldova.

With the opposition out of action, the most potent criticism of Mr Tusk and his government is coming from the media and think-tanks. They excoriate a recent pension reform as confiscatory. They highlight the government's sloth in honouring its election promises to reform Poland's clogged and clunky public administration. Chronic economic ills include low labour-force participation and incontinent public finances. The government trumpets strong growth (see article); but luck counted as much as judgment in that.

Worries over the government's preference for form over content has prompted outcry from some Civic Platform types, such as Marcin Meller, the editor of Playboy Poland (and a serious public figure). Civic Platform's poll ratings have dipped a bit, mainly to the benefit of the Democratic Left. That may reflect a rising vote for a secular, socially liberal brand of politics so far little seen in Poland. Yet Civic Platform is doing well, scoring 44% in the latest poll.

Mr Tusk shrugs off all criticisms of inaction. His record rests on electoral success, beating Law and Justice time and again—most recently in the presidential election in 2010, won by his lacklustre nominee, Bronislaw Komorowski. His next goal may be to win the presidency himself in 2015, sealing his position as Poland's dominant post-communist politician.

Yet the risk is that this would also mean four more years of cautious, PR-conscious government. During a visit to London recently, Mr Tusk highlighted a signal feature of the Polish character. Impatience, he said, is a "national asset": Poles want things to get better quickly. They may indeed prefer something more inspiring than Mr Tusk's affable but low-key style. But it is not on offer at the moment.

from the print edition | Europe

[Martinus]

Btw, this is from The Economist.

Poland's good press internationally is based on the same thing as PO's popularity locally: "At least we are not Hungary/PiS"

[Martinus]

And another article, this time on the economy:



POLAND is the only economy in the European Union that kept growing all the way through the crisis. Its ability to insulate itself from external shocks stems partly from history and geography. It is by far the biggest economy in central Europe (making up 40% of the GDP of the EU's ten new ex-communist members), and gets lots of oomph from domestic demand. Expansion in neighbouring countries, mainly Germany, is now stoking Polish growth, forecast at around 4% this year and next.


But Poland also entered the crisis in sound shape. Its banks were stodgy in their lending. The property market stayed unbubbly in most of the country. Monetary policy had been overly tight in the early years of the last decade. That slowed growth then, but proved a blessing later.

Another advantage was a floating exchange rate: the Polish zloty plunged during the downturn, helping exporters and the tourism industry. In the Baltic states (which had currency boards) and Slovakia (which adopted the euro in 2009) the burden of adjustment went uncushioned, meaning cuts in nominal wages.

Protection against external shocks gave Poland's policymakers plenty of room for manoeuvre. They did not need to hike interest rates to save the currency and soothe investors. They did not need a pro-cyclical fiscal policy to stave off default or devaluation. Instead Poland could afford a classic Keynesian response to the downturn. The government ran big budget deficits (7.3% in 2009 and 7.9% last year), a hefty fiscal stimulus that kept domestic consumption purring along while it collapsed elsewhere. For many of Poland's peers the crisis exposed the narrow base of their economies. When construction, exports and investment plunged, nothing could take up the slack. In Poland, the consumer kept spending.

For the stimulus to work, outsiders had to be willing to lend. Poland was well served by its finance minister, Jacek Rostowski, a sardonic English-born economics professor, who adeptly managed the borrowing splurge. Poland's credit rating barely budged as that of some other ex-communist countries plunged. It helped that Poland in 2009 gained, and did not need to use, a $20 billion credit line from the International Monetary Fund.

Wider worries about the euro zone and currencies on its periphery may have helped Poland, too. They kept away the hot money that has sent exchange rates soaring in other emerging-market stars. Even when the zloty hardened, demand from Germany kept exports booming (keen prices and flexible workers make Polish subcontractors a vital part of the Teutonic trade machine). "Germany helped save Mitteleuropa," says Marcin Piatkowski, a Warsaw-based World Bank economist. Poland has replaced Russia as Germany's main eastern trading partner, even including energy.

Another boon has been money from abroad. A million or more emigrants send home remittances (worth $9 billion in 2010, according to the World Bank). Poland was also allocated €67 billion ($92 billion) in EU funds for 2007-13. That is paying for new roads, faster railways and lavish training programmes. After a slow start, the Polish bureaucracy has proved one of the most effective spenders of this bonanza (efficiency is another story).

The result is a superficially happy picture: broad-based growth, falling unemployment, affordable borrowing and rising investment. But the current account and inflation are worries; so is the budget deficit, which the government said on April 26th it would cut to 2.9% in 2012.

Yet if Poland still wants to join the euro (perhaps in 2015), it will do so in better shape than many existing members. Mr Piatkowski speaks of a "New Golden Age", with Poland converging on west European levels of well-being soon after 2020. That is a fine goal. But first Poland must master its public finances, stoke innovation, widen labour-market participation and deal with the red tape that drags it down international rankings. Poles grumble about such things. They should fix them, too.

[Martinus]

[Zanza2]

What's the take in Poland on Germany and Austria opening their job markets to East Europeans on May 1? There has been some shrill comments in Germany on that, but mostly it is seen as beneficial and now being the right time. Even if a lot of the talented people will already have found a new home in Britain or Ireland (the latter are probably coming back though).

Cutting the deficit from 7.9% to 2.9% is certainly ambitious. How do they want to do that?

[Tamas]

I guess if they do it they will lose the next election.

[Zanza2]

Does Poland even have a credible opposition party? Last time, PiS came second, but from what little I heard, they seem to be even more crazy now than back when they ruled. Who else is there LiD, PSL?

[Sahib]

Does Poland even have a credible opposition party? Last time, PiS came second, but from what little I heard, they seem to be even more crazy now than back when they ruled. Who else is there LiD, PSL?

PiS will most likely finish second again. LiD collapsed shortly after the elections, it's SLD again and they or PSL are going to be PO's coalition partners most likely.

[Martinus]

What's the take in Poland on Germany and Austria opening their job markets to East Europeans on May 1? There has been some shrill comments in Germany on that, but mostly it is seen as beneficial and now being the right time. Even if a lot of the talented people will already have found a new home in Britain or Ireland (the latter are probably coming back though).

Cutting the deficit from 7.9% to 2.9% is certainly ambitious. How do they want to do that?

About 90% of all British/Irish emigrants have come back. You will probably see some increase in Polish immigrants in Germany or Austria, but it won't be anything near the old British levels - there is a language barrier, and pay in Poland has been rising pretty steadily over the last decade. In practice, it will probably be mainly unskilled workers who do not need to rely on language/education to get the job.

[Martinus]

Does Poland even have a credible opposition party? Last time, PiS came second, but from what little I heard, they seem to be even more crazy now than back when they ruled. Who else is there LiD, PSL?

It depends on your definition of "credible". PiS is certainly full of loons but they have a strong "core" voter support from app. 20% of the public, and polls up to 30-35% at times (and the support for PO is also quite volatile, ranging from 35% to 50% at times).

In practice it means that the government needs just one big fuck-up (one that does not need to even be their own doing, e.g. a second dip of the financial crisis, that would hit Poland this time hard) and PiS may be very well back in power.

[Neil]

PiS makes an excellent government though, due to the increase in Polish exports of histrionics and homo tears.

[Norgy]

PiS makes an excellent government though, due to the increase in Polish exports of histrionics and homo tears.

The market may become over-saturated.