Wednesday, 21 December 2011

Polish Left at Crossroads

It’s hard to believe that at the beginning of the 1990s Poland was regarded as being the best hope for the left in Central Eastern Europe. It now stands as the country with perhaps the weakest left in Europe and where right-wing ideology and parties dominate. Yet, Poland is a country whose destiny is largely determined by changes occurring in Europe, particularly inside the EU. Therefore, in order for the Polish left to reinvigorate itself, it needs to integrate with and seek to influence the political debates and movements occurring within the wider European left and help promote a common programme for European development.

Read More....

Tuesday, 13 December 2011

Bulldogs and Eagles

There’s nothing quite like a good row in Brussels to get the British patriotic juices flowing.

David Cameron returned to Britain’s shores – after vetoing a treaty involving all 27 EU states – like a retuning hero, cheered on by his fervent backbenchers and jingoistic media.

Yet Cameron was not in Brussels representing Britain nor his nation’s concerns. No, he was there to defend the interests of Britain’s financial sector, the City of London. Cameron was primarily concerned with securing the welfare of the very institutions that have contributed more than any other to causing the current crisis.

And he may not even have managed to do this successfully. The fact remains that while the fools in the gallery cheered, Britain has now released it diplomatic nuclear arsenal and is more isolated in Europe than ever before. No compromises were made and no concessions won and it is quite possible that Britain’s separation from the rest of the EU will have negative consequences for its economy. If this was a victory for Britain, then one wonders what a defeat looks like.

There is however much to be opposed to in the new EU treaty. The summit agreed that all national governments would be committed to reducing their structural budget deficits to 0.5% of GDP and that the previous rules requiring budget deficits to be below 3% of GDP will be strengthened. In effect a whole series of new regulations are being introduced – including the EU Commission being given the prior oversight of national budgets – in order to enforce an undemocratic programme of austerity and budget cuts throughout the EU. The real imbalances and deficiencies within the European economies are not being addressed and instead Europe’s citizens are being forced into an ideological straightjacket of cuts (Cameron has of course decided that he prefers his own national variation – how very British). Put simply, if allowed to go ahead, this treaty marks the end of the European Welfare State.

While the British sailed away into splendid isolation, countries such as Poland were doing everything in their power to be included in the new treaty. What Poland feared more than anything else was being left on side-lines of any new agreement, with politicians such as Sarkozy pushing for an agreement that included just the 17 eurozone countries. For over a year now – and particularly during the past six months whilst holding the EU Presidency - Poland has been pushing for a general EU Treaty that included all its member states.

The recent agreement pacifies some of Poland’s fears, but not all of them. Non-eurozone countries have been allowed into the treaty, will probably need to meet the budget requirements that it contains and will be required to pay into the new fund included in the treaty. However, although non-eurozone states will be able to participate in the meetings of the new body, they will not have the right to vote.

It is quite understandable that Poland would not want to be isolated within the EU and that it is seeking to be at the centre of decision making. It is far easier on the peripheries of Europe to see what catastrophe awaits us if the eurozone and EU were to break up. However, the requirements that will be placed upon it, by signing up to this treaty, will potentially have grave negative consequences for the Polish economy.

Since joining the EU – and particularly since the outbreak of the economic crisis – Poland has found itself in a relatively fortunate economic situation. While countries in Southern Europe have seen EU funds dry up, they have also been stuck in a currency union in which they have been unable to devalue their currencies. In contrast, Poland has seen EU funds move eastwards and been able to use these to increase public investment in the economy. At the same time its currency has devalued in relation to the euro, making its exports more competitive. Whilst not rushing into the eurozone, it has also been able to sensibly allow its budget deficit to rise in order to retain public spending and fully utilise the available EU funds.

All this is about to end. As a signature to the treaty Poland will be required to rapidly bring down its deficit. This will help to shrink the economy and will make it harder for the government to continue with its programme of public investment (something it has already indicated it is planning to halt). Also, Poland is likely to now speed up its application to join the eurozone (which is now opposed by around 70% of Polish society), which could see its currency increase in value and therefore decrease its economic competitiveness.

The task of implementing the present EU treaty will meet many obstacles, not least political opposition. However, with the European left unable to offer a coherent alternative for a federal social Europe, we may expect the conservative and nationalist right to take the initiative. In Poland the conservative right has already declared the government’s signing of the treaty to be an act of national betrayal and that the Polish government should follow Britain’s example. On the thirtieth anniversary of the implementation of Martial Law in Poland, the Law and Justice Party is organising a demonstration today that combines a commemoration of this event with accusing the present government of giving away the country’s national sovereignty.

European convergence presently seems to involve yet more austerity and thus a deeper recession. Yet if the European project breaks up, then we will be faced with more economic chaos along with further political division and reaction. These are the options presently on the table and neither look particularly appetising.

Wednesday, 7 December 2011

Public Investment to Fall, Unemployment to Rise

The Polish government has published its revised budget for 2012, which is based upon the premise that economic growth will reach 2.5% next year, down from its previous prediction of 4%. The government also now forecasts that unemployment will increase to 12.3%, whilst earlier it had estimated that it would stand at 10%.

The government hopes that its declared policies of spending cuts and tax rises will help it to meet its aim of bringing the budget deficit to below 3% of GDP and public debt to around 53%. Disturbingly, the government has also announced that public investment - which has so far been the major engine of economic growth in Poland - will be sharply cut next year.

The government estimates that public investment will grow by just 1.5% in 2012. As Poland will be completing its investments for the Euro2012 football championships during the first half of the year, this means that thereafter public investment will be drastically reduced.

This will undoubtedly help instigate an economic slowdown from the second half of 2012, which will have a particularly negative impact on the labour market. Perhaps this is also one of the reasons why the government believes that unemployment will be more than 2% higher than it had previously thought.

Yet Tusk’s administration does not seem to be particularly concerned about this matter and rather accepts it as a fait accompli . While unemployment continues to rise the government has even announced in this budget that the Labour Fund will allocate just ZŁ3.4bn for training and internships. This is half the sum which it spent on this two years ago and less than ZŁ2bn of this will be spent on actually fighting unemployment.

The government has targeted spending cuts and tax rises as a way to bring down its budget deficit and public debt. Although the effects of these policies will not be properly felt until 2013, by reducing public investment and employment spending the government is endangering the country with a sharp economic downturn and a rise in unemployment.

Rather than continuing the economic policies that have been relatively successful in Poland since the outbreak of the economic crisis, the Polish government is bringing the country more into line with the current failed economic orthdoxy that is driving policy throughout the EU. Ironically it is such policies that are likely to actually cause an increase in its debt.

Thursday, 1 December 2011

One Step Forward, Two Steps Back

This week’s speech in Germany by the Polish Foreign Minister Radosław Sikorski, in favour of a Federal Europe, is a significant development in Polish and European politics.

With the Eurozone facing the possibility of collapse, Sikorski urged its strongest economy Germany to act in order to save the currency zone and thus the European Union. In dramatic language he described the huge negative consequences that such a collapse could bring. In order to divert such a development he has called for further EU integration, including the establishment of a common fiscal, immigration and foreign policy. In historically significant language he stated that:
I will probably be the first Polish foreign minister in history to say so, but here it is: I fear German power less than I am beginning to fear German inactivity.

The political response in Poland to Sikorski’s speech has been depressingly predictable. PiS accused Sikorski of betraying and subordinating Poland to Germany and even suggested that the Foreign Minister should be brought before a state tribunal. All this has diverted attention away from the real content of Sikorski’s speech and the vision of the type of EU that he proposes is created. In turn the mainstream left has fully backed Sikorski’s statement, failing to highlight its many negative elements.

There are parts of Sikorski’s speech that can be evaluated positively.

Firstly, Sikorski is one of the first major politicians in Europe to have spoken openly and candidly about the seriousness of the choices facing the EU today. He put the issue straightforwardly: either Europe unites and integrates more or it will break apart. As a representative of the Polish state, Sikorski could remind his audience in Germany of the historical lessons of division and conflict that have occurred in the continent.

Sikorski also addressed some of the myths that are being repeated during the present crisis. In particular, he challenged the idea that the eastern enlargement of the EU is in some way responsible for the Union’s current problems. He counteracted the argument, that is increasingly popular currently in the EU’s richer states, that expansion has only brought them costs and no benefits. Talking about the economic profits enjoyed by the richer EU economies from the opening up of the eastern economies Sikorski noted:

Enlargement has created growth and wealth all over Europe. The EU15 exports to the EU10 countries rose almost twofold in the last ten years. It’s even more striking if you break it down by countries. Britain’s export to the 10 countries that joined after 2004 rose from €2.2 bln in 1993 to €10 bln last year; France’s, from €2.7 bln to €16 bln, Germany’s, wait for this – from €15bln to 95 billion Euros. The total volume of trade between EU15 and EU10 amounted to €222 bln last year, up from €51 bln in 1995. A tidy sum. I guess it sustains a job or two in Old Europe.
The Polish Foreign Minister also reminded about the positive effects of Poland’s entry in the EU and at how it has been the most successful EU economy (in terms of GDP growth) since the outbreak of the crisis.

Furthermore Sikorski warned about the dangers of protectionism and nationalism and argued against the prospect of further integration being confined to a select group of EU countries. Integration inside the EU, he reminded, should include all of the EU27 states.

Yet when we go beyond these general statements of unity against division, we find that the type of new Europe being proposed by Sikorski is highly regressive and that it would in fact deepen the current crisis. Sikorski’s repeats the myth that the major cause of the current crisis is too high public spending and debt. He therefore reasons that the best way to address this issue is for there to be an increased and expanded programme of austerity and spending cuts throughout the EU.

This argument ignores the experience of those countries that have introduced draconian spending cuts inside the EU. These have tended to repress economic growth, increase unemployment and therefore actually inflate public debt and budget deficits. Sikorski has also failed to highlight the reasons for Poland’s recent positive economic growth. This has been achieved by allowing a moderate expansion of public debt and the budget deficit in order to increase public investment and capitalise from the inflow of EU funds. Sikorski would have to look no further than his own backyard to realise that investment and not cuts are the best way forward for the European economy.

In contrast Sikorski has lauded the Polish government’s recent decision to implement its own austerity programme as an example for other EU states to follow:
Next year alone we intend to cut our budget deficit to 3% of GDP and the overall debt to 52% of GDP. By 2015 the deficit will be brought down to 1% of GDP and public debt to 47%. The retirement age will be lifted to 67 years for both genders. Pension privileges for soldiers, policemen and priests will be cut. The disability pension contribution will increase by 2%. Child-benefits will be taken from the rich and given to the poor.
Sikorski continues that the policy of cuts and austerity should be assured through introducing new rules and punishments that would prevent national governments from expanding their spending and debt:
In order to strengthen economic convergence the Commission and the Euro group would get the right to scrutinize in advance all major economic reform plans with potential spill-over effect in the euro area, impose sanctions on countries failing to effect policy recommendations, and permission for groups of countries to synchronize their labour, pensions and social policies. Financial discipline would be strengthened by giving access to rescue funds only to members abiding by macro fiscal rules, by making sanctions automatic and giving the Commission, the Council and the Court of Justice powers to enforce the 3% ceiling on deficit and 60% ceiling on debt. Countries in excess deficit procedure would have to present their national budgets for approval by the Commission. The Commission would get powers to intervene in the policies of countries that could not fulfil their obligations. Countries persistently violating rules would have their voting rights suspended.
These proposals of increased ’fiscal discipline’ are almost the sole basis of Poland’s idea for further European integration. Yet what is even more striking is what Sikorski suggests leaving outside of his new Federal Europe. In probably the most important extract from his speech, Sikorski states:
The more power and legitimacy we give to federal institutions, the more secure member states should feel that certain prerogatives, everything to do with national identity, culture, religion, lifestyle, public morals, and rates of income, corporate and VAT taxes, should forever remain in the purview of states. Our unity can survive different working hours or different family law in different countries.

What this means is clear. Countries would be allowed to maintain regressive policies on such things as the relationship of the Church and State and same sex marriages. The practices of social dumping would also be expanded through allowing some countries to maintain low tax rates and longer working hours. (For an excellent article in Polish on this see here)

Despite this reality the parties now claiming to represent the left in parliament - both the Palikot Movement and Democratic Left Alliance - have almost uncritically given their backing to Sikorski’s speech. This represents an extremely dangerous development in Polish politics, where the two political options being presented to the population are either neoliberal Europeanisation or nationalist conservatism. A good start for the left in challenging this hegemony would be to articulate an alternative vision for a federal democratic, secular and social Europe.

Tuesday, 22 November 2011

The Mixed Signals of Palikot

With the Democratic Left Alliance (SLD) in a seemingly terminal decline, the major political force claiming to represent the left in Poland is now the Palikot Movement (RP). RP has more MPs than the SLD, and since October's parliamentary elections has been a far more pro-active political current in and out of parliament.

Despite its left wing stance on issues such as the relationship between the Church and State and Lesbian and Gay rights, RP had taken an overtly liberal stance on economic issues, such as supporting the introduction of a flat income tax.

However, in recent weeks RP has been making some moves to be seen as a party that represents the economic interests of the poorest sections of society. Primarily this has been done through Palikot forming an alliance with the 'Office of Social Justice' movement (KSS), led by the socialist Piotr Ikonowicz.

The KSS campaigns against poverty and social exclusion in Poland and has been particularly active over the issue of housing evictions. Palikot has donated his own parliamentary salary to the KSS and is promoting it as a social movement to combat poverty in Poland. Furthermore, last weekend a meeting was held between RP MPs and representatives of KSS to discuss joint work over issues such as social security and the labour law.

At the same time, Palikot re-affirmed his commitment to a number of liberal economic policies. In a recent interview he defended the policy of introducing a flat-income tax rate, supported the compulsory private pension system, promoted the privatisation of a large section of the health service and re-affirmed his belief that students should pay for studying on courses (such as humanities) which do not teach the skills needed on the labour market. Furthermore, a document has recently been put up on RP's website that includes support for a flat tax of 18% for VAT and income and business tax. The major 'pro-growth' proposals in this programme are reducing the level of bureaucracy for businesses and liberalising the labour code.

In response to criticisms about this ambiguity, RP's spokesperson Andrzej Rozenek has argued that the left-right divide is archaic and has no meaning in contemporary society. It is interesting that Rozenek was previously considered to be one of the party's leading left-wingers.

RP has also recently announced that in Europe it will cooperate with the Alliance of Liberals and Democrats for Europe (ALDE). This is the third largest group in parliament and although it currently has no Polish MEPs as members it previously had relations with the neo-liberal Freedom Union and Democratic Party.

It seems that Palikot recognises that there is a space on the left in Poland which he can fill. His secular and cultural liberal programme appeals to voters from the left and statements on poverty and social inequality allow him to extend into other areas of the left electorate. While such developments should be welcomed and one has to wait to see how RP develops (particularly as it has yet to form as an actual political party) its continued support for liberal macro-economic policies and its alliance with liberals in Europe separates it off from the rest of the Polish left.

It seems that RP is moving towards being a social liberal party where statements on social exclusion and poverty can be deployed as populist slogans, yet where its actual economic programme would make them worse.

Saturday, 19 November 2011

A Speech For the Rating Agencies

These have been a bad few weeks for democracy in Europe. Italy and Greece are now ruled by technocrats, trained in American banks, appointed to push through austerity measures that no government with a democratic mandate could manage. Even in those countries where elected administrations ostensibly rule, economic policies are being devised more according to the concerns of the international markets and the whims of the rating agencies than the needs of the electorates.

On the economic peripheries this situation is most pronounced. Most obviously the governments in Southern Europe are being forced into a programme of extreme austerity under the pretence that this will instigate growth and bring down public debt. Likewise, in Central-Eastern Europe a similar - if more subtle - game is being played out.

In Hungary investors have been awaiting proposals from the government for a deal from the IMF for a new loan. The negotiations between the IMF and the government in Budapest essentially concern the amount of economic sovereignty that the country should be allowed to have. There is a lot to be concerned about when it comes to Orban's government in Hungary. However, the IMF is most worried about reversing some of its more positive economic policies, such as passing part of the burden of mortgages taken out in Swiss Francs onto the international banks that created them and abolishing the compulsory private pension pillar.

Therefore, despite the fact that Hungary's economy is growing and its budget deficit and public debt are at comparatively low and manageable levels, the country's bond's have been put on watch for a possible downgrade to junk by both Fitch and Standard and Poor's, leading to a surge in borrowing costs in the country.

The situation is similar in Poland - a country that has grown almost twice as much as any other inside the EU over the past three years - where the representatives of the international markets are turning the screw. Poland's economy has expanded through increasing borrowing in order to drive public investment (boosted by EU funds) in the country's infrastructure. With public debt standing at a meagre 53% of GDP any rational approach to the Polish economy would be to continue and in fact deepen this economic course of development.

The international markets and agencies have other ideas. Over the past few weeks the three largest rating agencies have been making it clear that if the new Polish government does not undertake the structural reforms that it deems necessary then it too will face a downgrade, which of course would lead to soaring borrowing costs.

It was in this atmosphere that PM Donald Tusk made his opening speech to the new parliament, setting out his government's priorities for its next term in office. Tusk did not even attempt to conceal that the main purpose of his speech was to appease the financial markets, stating 'I do not hide the fact that the aim of this is to stabilise the financial situation of Poland. This is positive for the reputation of Poland and connected to the security of our bonds.'

And so Poland is embarking on a course of drastic deficit and debt reduction as it attempts to keep in line with the policies of other European economies that are undergoing economic contractions. The government predicts that public debt will reduce to 42% of GDP by the end of 2015 and that the budget deficit will stand at just 1% by the end of the government's present term in office (it currently is above 7%). Quite why this should be the aim of any government in the midst of the worst global economic crisis since the 1930s is not explained.

And how will this all be achieved? Well if Tusk is anything he is not a stupid politician and he at least understands that part of the austerity has to be shared out amongst different groups if he is to maintain political support. Yet behind these attempts at policy 'triangulation' Tusk has drawn a clear line under his first administration and opened up a period of cuts that are, on the whole, socially and economically regressive.

One of his major ideas is to move social policy away from the principle of universalism. Therefore, child benefits and tax reliefs will no longer be made available for those earning more than 85,000 złoty a year. All this is dressed up in the progressive language of supporting the poorest in society. However, the poor will be no better off from the proposals, which will further socially stigmitise those who earn benefits, increase bureaucracy in the system and decrease social solidarity.

One of the other major announcements of Tusk was that the retirement age would be successively raised for men and women from 2013 until it reaches 67 (it is presently 65 for men and 60 for women.) Although the normal demographic arguments were deployed, this is being carried out in a country where the average life expectancy is just 75 and where youth unemployment stands at around 25%. Tusk also declared that the government would be seeking to move away from the annual percentage rise in pensions and also that the early retirement privileges of certain social groups (such as uniformed workers and coal-miners) would be abolished.

Along with making some farmers pay full health insurance, employers will have to pay 2% more in social insurance contributions. The only social groups that will directly benefit from this government will be soldiers and the police, who will enjoy a salary rise of 300zł, which will possibly be repeated before the end of the government's present term.

Tusk has not laid out any programme for economic or social growth and rather pins his hope on the delusion that cuts will instigate development. Nor has he proposed any measures to tackle the serious socio-economic problems that face the country such as high unemployment, workers employed on insecure contracts with low wages and the lack of housing.

Tusk claims that he is building a force of the political centre that can push through painful but necessary reforms. He has warned about the need to counter radicalism on the right and the left. It is true that compared to many other governments in Europe his proposals are relatively modest. Yet they place Poland in line with the policy of austerity being pursued around the continent and are likely to depress economic growth and raise social divisions. It is exactly these phenomena that are increasing social discontent and unrest throughout Europe.

Tuesday, 15 November 2011

Reflections on 11 November

For the second year running the anti-fascist movement was successful in blocking the 'march organised by the Polish far-right in Warsaw on Poland’s Independence Day. Grouped around the '11 November Agreement' Association, the counter-demonstrators organised a concert and blockade along one of Warsaw's main streets, preventing the far-right from walking along their planned route.

A stand-off occurred with the two demonstrations separated by lines of police. In response the far-right began to fight with the police and throw stones, street paving and flares. They also separated into smaller groups and attempted to attack some of those on the edges of the counter-demonstration as well as intimidating passers-by and attacking some bars and cafes.I personally saw someone getting seriously beaten up by a group of 'patriots' who were looking for anti-fascist demonstrators. Over 40 police were hurt during the actions and 29 people taken to hospital.

Once the demonstration had proceeded along a revised route and approached its destination (the statue of the leader of the pre-war far-right in Poland - Roman Dmowski) they also attacked and burnt the vehicles of media covering the march.

The far-right demonstration this year was attended by a large number of football hooligans who had been mobilised from around the country. This is a worrying development and is a tactic that has been used by far-right groups in other countries (such as the English Defence League).

Some of the violent attacks by the far-right can be viewed here:

However, rather than the perpetrators being outrightly condemned for the violence that occurred in Poland's capital, some politicians and part of the media have sought to proportion equal blame on the counter-demonstrators.

This has primarily happened through claiming that the violence was partly caused by a group of German anarchists who were supposed to have come to Poland looking to cause trouble. The leader of the main opposition party, Jarosław Kaczyński, condemned the sight of Germans ‘attacking Poles’ on Independence Day.

As well as the demonstration being attended by representatives of far-right groups from other European countries, the counter-demonstration was joined by a number of anti-fascist activists from abroad. Out of the 210 people who were arrested on the demonstration, 95 were from abroad, including around 70 German anti-fascist activists. However, these people had already been arrested hours before the violence took place after being tracked by police since crossing the border.

The counter-demonstration was peaceful and sought only to stop the march of the far-right through the streets of Warsaw. The fact that some people are attempting to paint those involved in this counter-demonstration as being equally to blame for the violence is a cynical political manoeuvre. However, it has been partly successful and is being used by sections of the right to conceal the true perpetrators of the violence on 11 November in Warsaw.

This propaganda offensive also includes denying the neo-fascist and racist nature of the demonstration in Warsaw. While the demonstrators now try to avoid using openly racist or fascist slogans or salutes, the political character of the march is clear. It is partly organised by far-right organisations such as the National Radical Camp (ONR) and the All-Polish Youth organisation, both which follow the tradition of Dmowski and the pre-war Polish far-right.

However, the demonstration was also successful in reaching out beyond the confines of these groups. The danger is that the counter-demonstrators will be portrayed as the ones who prevent patriots from demonstrating on the country’s Independence Day and the cause of the terrible scenes of violence on the streets of Warsaw. Undoubtedly, this will involve calls for the police to prevent a counter-demonstration that blocks the march from taking place next year.

It is essential that the anti-fascist movement win this argument and engages with as wider a section of society and political opinion as possible to recognise the politically repulsive and violent nature of the Independence Day march organised by the far-right.

Thursday, 10 November 2011

Below the Belt

It was heartening when watching the opening of the new Polish Parliament yesterday to see a more socially diverse group of MPs.

Most prominently were the first openly gay (Robert Biedroń) and transsexual (Anna Grodzka ) MPs from the Palikot Movement, alongside the country's first black MP (John Abraham Godson) from PO. Despite this progress, the Polish parliament - dominated as it is by representatives of the conservative right - showed how it remains stuck in the past.

Biedroń managed to offend and amuse a number of MPs when he spoke in favour of the nomination of Wanda Nowicka for Deputy Speaker of parliament (WiceMarszałek). Nowicka is a Palikot Movement MP and a long-serving activist of the Womens' Movement in Poland and at the second attempt has been elected as Deputy Speaker. Defending his collegue against attacks from the right Biedroń dared to use the term (wait for it).... 'Below the Belt'.

As in English this is a commonly used phrase in Polish. However, for the MPs from PO and PiS (including PM Donald Tusk) it was just too much to hear a Gay MP use such phraseology and they responded with howls of laughter.

However, rather than being embarassed by their behaviour a number of MPs then went on the attack against Biedroń. Interestingly, it has been MPs from PO that have criticised Biedroń the most - as the conservative wing of the party seeks to reassert its influence.

The PO MP Julia Pietra argued that Biedroń had crossed acceptable limits in the parliament and during a subsequent debate on television she argued that he always talks about the same thing: sexuality. As Biedroń pointed out there was nothing in his speech about sexuality. Furthermore, another leading figure from PO - Stefan Niesiołowski - stated that he voted against the nomination of Nowicka because of Biedroń's irritating and stupid smile (sic). As normal Niesiołowski was growling and grimacing as he said this.

Biedron won over 17,000 votes at the last election, which was possible due to years of campaigning against homophobia during a time when such voices were rarely heard. The election of MPs such as Biedroń is a great advance for Polish politics. However, from yesterday's spectacle it is obvious that many in the parliament are not yet ready for this.

Tuesday, 25 October 2011

Mixed Economic Signals as New Crisis Looms

As Europe’s leaders seek to contain the ever growing economic crisis in the eurozone, the countries in Central-Eastern Europe (CEE) are holding their breath.

When the first wave of the economic crisis hit Europe in 2008, the economies of CEE were amongst the worst affected. Therefore, whilst the average rate of economic decline in 2009 was 4.3% in Western Europe, the EU economies in CEE fell by 8%.

Although such a dramatic economic downturn is not currently being predicted, all indicators point to a marked slowdown throughout CEE. The European Bank for Reconstruction and Development (EBRD) has drastically reduced its prediction for economic growth in all countries in the region for 2012: down from 3.5% to 1.7%.

With the outcome of the crisis in the eurozone countries still uncertain, and the possibility of a new double dip recession in Europe a real possibility, then this prediction may be over optimistic.

Whatever happens, it is clear that a region struggling to emerge from a severe economic crisis is facing more turbulent times ahead.

Poland is still predicted to be one of the region’s best performing economies, with its estimated growth for 2012 cut from 3.5% to 2.2%. In the wake of the recent elections – when politicians begin turning their attention to realities rather than fantasies – the signals coming out of the Polish economy are mixed.

Despite the negative economic climate in Europe retail sales have remained strong, growing at an annual rate of 7.1% in the third quarter of this year. Industrial production has also continued to grow, rising by 4.1% in the third quarter of 2011. Will it be possible to maintain this course of positive economic growth?

Leaving aside events in the eurozone economies, it should be expected that the government led investment drive in the country’s infrastructure will continue at least until the Euro football championships in June 2012. Thereafter, the ability of the government to continue its course of public led investment will be decided by its own budget situation and the willingness of the richer EU states to contribute to the EU’s next budget, due to come into force in 2014.

More immediately there are worrying signs about whether the growth in domestic consumption can be maintained. Firstly, it seems that the error committed in the Western capitalist countries – of expanding an unsustainable credit bubble to drive economic growth – is in danger of being repeated in Poland.

During the past two yeas the number of Poles who have problems paying their bills and meeing their credit payments has risen by 25%. 2.08m Poles have difficulties with their credit payments, with the average debtor owing nearly 10,000 zloty. Overall private debt has now reached a total of 32.4bn zloty in Poland. With the possibility of a new banking crisis breaking out in Europe these are disturbing figures.

Another negative development in the Polish economy is the slowdown in the labour market. According to the Polish Statistics Agency (GUS) in September alone the number of jobs declined by 5,000 and employers have stopped creating new vacancies that could replace these. Whilst a year ago there were 18 unemployed people for each job vacancy, this has now risen to 27. In September this year unemployment stood at 11.7% (in absolute terms 1 862 800 people), which is likely to increase in the coming year. In such conditions, over the past year, those seeking work have reduced the average amount that they are prepared to accept as a monthly salary by 322 zloty. Such depressed wage demands will further eat into people’s consumption power, particularly as inflation currently stands at around 4.3%.

With the government facing a possible economic downturn it is already talking about revising its over optimistic budget for 2012, which it presented before the elections. The Finance Ministry predicted in this budget that economic growth would reach 4% in 2012 and that unemployment would be around 10%.

With the government determined to rapidly reduce its budget deficit, it is likely that it will embark on a new round of economic austerity. However – as shown by the experiences in other European countries – such a policy would only depress economic growth, thus placing further pressure upon the government’s finances.

Wednesday, 19 October 2011

Just when you thought it couldn't get worse......

The Democratic Left Alliance (SLD) seems determined to rub salt into its self-inflicted wounds.

It may have been hoped that the SLD would have learnt some lesson after suffering its worst ever election defeat. At the least it may have been expected that it would have sought to change its current political course and attempted to begin the process of opening itself up to other currents on the left.

It was in this spirit that 7 SLD MEPs wrote to the SLD's national MPs urging them to vote for a leader of its parliamentary group that would begin this process. It was pretty obvious what this meant: vote for Ryszard Kalisz instead of Leszek Miller.

Although the political programme of Kalisz may not be radically different from what had come before, many believed he would begin a process of instigating internal changes within the SLD that would allow it to rebuild some support amongst the left in Poland.

But the SLD MPs decided that the best way forward was to re-elect Leszek Miller. Miller represents more of the same and will only dispirit those with any hope that the SLD could reform itself (see here, here and here for previous articles concerning Miller.) It will also allow Miller to consolidate his position before the run up to new leadership elections scheduled to take place in January next year.

Oh and Napieralski has still not resigned as leader (sigh).

Thursday, 13 October 2011

15th October Agreement

The '15th October Agreement' movement has called its first action in Warsaw tomorrow, which will start at 12pm outside of the gates of Warsaw University.

This is how they describe themselves and their activities:

The October Fifteen Agreement was established at the initiative of several young people above all students of Wielokulturowe Liceum Humanistyczne im. Jacka Kuronia.

The Agreement is thought to became a platform for joint action, above all to show our solidarity with Ruch Oburzonych w Hiszpanii, as well as to submit similar demand to Polish authorities.

Form of cooperation which we propose is (after Spanish movement) quite loose coalition platform of groups which are combined as the opposition and with general direction of their criticism. Basic requirement is that (again after Spanish movement) we strive to avoid physical violence as a form of protest.

The Agreement is not responsible for the content and views voiced by organizations which are going to join The Agreement. ‘Some are progressive, others more conservative. Some are religious, others not. Some are politically defined, others – apolitical.’ – so it was in Spain and we want it to be in Poland. Our solidarity with May 15. and that we are outraged are what is going to unite us.

We are as an initiative group open for your propositions and cooperation. Beyond the direct action we will also be grateful for any additional help with spreading the information (posters, leaflets, printing houses, news channels) and also with theoretical background (arranging meetings, discussions, film screenings) around October 15

Wednesday, 12 October 2011

The End of the 'Post-Communist' Left?

When the former President Aleksander Kwaśniewski said on election night that this could be the last time that the Democratic Left Alliance (SLD) enters parliament, he wasn’t exaggerating.

The Polish left has now reached its nadir. Not only has it scored its worst result in any election since the end of Communism, but it has also been overtaken by a liberal populist movement (the Palikot Movement – RP) that is trying to portray itself as the new party of the Polish left. The left is facing the very real possibility of extinction from the political mainstream in Poland.

It goes without saying that the SLD – under the leadership of the hapless Grzegorz Napieralski – ran a poor and ill-thought out election campaign. Napieralski had led an energetic campaign during last year’s Presidential elections and was able to represent himself as the young alternative to the two candidates from the right. Although he failed to articulate a political alternative to the right, he did manage to accumulate enough political capital to help strengthen support for the left in the run up to the parliamentary elections.

However, rather than reaching out to other activists and organisations from the left – who had previously become disillusioned with the SLD – Napieralski turned the party both inwards and to the right. Napieralski came to embody the worst features of the post-communist left in Poland. In the all-important game of deciding who should be in which position on the party’s electoral list, Napieralski chose his friends and close allies above genuine activists. This meant that in the run up to the elections there were a number of high-profile defections (both to PO and RP) that weakened the support of the party.

The most galling aspect of this political manoeuvring was the re-integration of former PM Leszek Miller into the leadership of the SLD. Miller was given first place on the party’s electoral list in the winnable seat of Gdyńia and became a high-profile figure during the election campaign. The political influence of Miller upon the political strategy of Napieralski became all too clear. This was particularly symbolised by the party’s decision to sign an economic pact with the Business Centre Club - an organisation that had openly praised the former Prime Minister.

It should be remembered what damage Miller has done to the left in Poland. It was Miller who was PM when support for the SLD declined from over 40% to 11%. His government was seeped in corruption scandals, which helped build the image of the SLD as a party of privilege and power. It was Miller who reneged on his promises to tackle the privileges and power of the church and reform the abortion law (policies on which the SLD was elected.) It was Miller who argued that the left should become supporters of neo-liberal economics and even advocated introducing a flat-income tax rate. Finally, it was Miller who followed Bush and Blair into their disastrous military adventure in Iraq. Yet, while even the mention of Tony Blair’s name at the Labour Party conference is met with jeers and boos nowadays, Miller returned to parliament this week.

The problem for the SLD is that for more than two decades it has been trying to be accepted as part of the mainstream. At the start of the transition – during a time when the legal right for those connected to the old system to participate in politics was under question – it did all it could to convince people that it was committed to the course of reform. Once this had been established, it then sought to show that it was not an ‘anti-clerical’ party and would not challenge the authority of the Church.

However, while the SLD remained stuck in this ideological straightjacket, Polish society was changing. Over 80% of society believes that the Church should be separated from politics. Young Poles lead life-styles that are far removed from the doctrines of the Church and are closer to those within the majority of European societies. It is not that Poles have suddenly stopped believing in God, but they have certainly realised that the privileges and power, accumulated by the Church hierarchy over the past two decades, are excessive.

It is in these conditions that Janusz Palikot was able to usurp the SLD and win the support of that part of the electorate that is the most liberal on social and cultural issues. After splitting from PO, Palikot became the champion of policies such as removing compulsory religious education from schools, making priests pay taxes, supporting the state-funding of in-vitro treatment, supporting same-sex legal partnerships and legalising marijuana. This strategy allowed him to successfully win the support of those parts of the electorate that were dissatisfied with the conservatism of PO and the timidity of the SLD.

Despite Palikot’s stance on these matters he is no man of the left. Alongside this array of social and cultural policies he advocates an economic policy of more neo-liberal reform. Most strikingly, he supports the introduction of a flat tax (18% for VAT and income and business taxes) and advocates no programme of economic redistribution at a time when social inequalities are once again growing. RP is setting itself up to be the leading advocates of reform in parliament and it is to be expected that this will include them pushing for the government to introduce further liberal economic reforms. It will be interesting to see whether those in his movement that are genuinely from the left will oppose these moves.

While some of the policies of Palikot are progressive, and many of these are supported by the majority of society, his overall programme is not. For the past few years Polish politics has become dominated by symbolic cultural conflicts that have disguised the real socio-economic problems and challenges facing the population. Palikot’s aim is to harness the frustration’s of the middle class through waging a cultural war in the country and attack his opponents in an often primitive and offensive manner (such as claiming that Jarosław Kaczyński was responsible for the Smoleńsk tragedy.) In many ways he replicates the so-called ‘new atheists’ in the West, who use progressive liberal principles as a guise to promote regressive political aims (such as banning Muslim women from wearing the veil).

Palikot has already become enemy number one for the Law and Justice Party (PiS), who will attempt to show how Palikot, in alliance with PO, represent an immoral elite that ignores the economic difficulties faced by the majority of society. The danger of such a situation is that social and cultural liberalism will become further regarded by some as the preserve of the privileged few and that the causes of economic inequality will be hidden behind artificial cultural conflicts.

For the left the situation is more complicated. In order to reassert its independence it needs to consistently support progressive social and cultural reforms, whilst also developing a clear left economic programme that promotes economic growth, develops public services and reduces social inequalities. As the economic crisis worsens in Europe it needs to maintain a clear political stance of ‘investment not cuts’ and oppose attempts to shift the burden of this crisis onto the poorest sections of society.

For these reasons the left has to rebuild itself in opposition to and not in alliance with the Palikot Movement. Immediately the SLD should open itself up to all those on the left and help instigate a process of creating a new organisational framework that can represent the left’s pluralism. All of the left at this moment should realise its common interest and understand the seriousness of the challenges that lie ahead of it. For if it doesn’t act now then it may be too late.

Monday, 10 October 2011

Tusk Bucks the Trend

The victory of Donald Tusk's Citizens' Platform party (PO), at yesterday's parliamentary elections, is significant for two reasons.

Firstly, this is the first time in the country's history (which includes the inter-war period) when a governing party has been re-elected in an open and free election. PO has not only won the largest share of the vote, but has gained enough seats to continue its coalition with the Peasants' Party (PSL). It really couldn't have wished for a better night.

Secondly, the victory of PO goes against the current trend in European politics. The expanding crisis within the eurozone has had its own affect upon the political scene in most European countries. One result has been the strengthening of the conservative-right, which has used the ideologies of reaction and division (such as racism and xenophobia) as the liberal consensus is undermined by growing economic hardship.

It is true that the Polish political scene does not replicate those in the vast majority of European countries - dominated as it is by two right-wing parties. Nevertheless, there is a measurable difference between many (although not all) of the social and cultural policies of PO and its more conservative rival the Law and Justice Party (PiS). Furthermore, with the liberal populist Palikot Movement (RP) winning more than 10% of the vote, it can be seen how there has been a shift to the left in this election on social cultural issues; and to some extent on economic issues, as PO has had to temper its more neo-liberal rhetoric.

Yet, although the parties of the conservative right have been strengthened in many European countries, they have still suffered their own defeats. The more general trend in recent European elections has been that nearly all governing parties have been ejected from power as the social effects of the economic crisis have been felt. Any governing party that is able to be re-elected in today's Europe is doing well, let alone in a country which has never done so before in its history.

PO have managed to extend their support into some of the heartlands of PiS and re-establish themselves as the hegemonic party not only of the right but of Polish politics. The graphic below shows how PO has extended out of its western heartlands and won in regions previously controlled by PiS.


How has it been possible for PO to claim such an impressive victory? Well, its the economy stupid. It's been oft repeated that Poland has been the only EU country to have avoided a recession since the outbreak of the economic crisis. Although critics have rightly pointed to the growing hardships for many social groups and the terrible state of many public services, it still has to be accepted that growth is better than decline.

Tusk has proven himself to be a pragmatic leader with a political skill and instinct rarely displayed by his rivals. He has avoided confrontation with the teachers and its strong trade union by raising their wages; and he has sensibly partly reversed the compulsory private pension system - an act of ideological treason for some.

The major slice of political luck for this professed heir of Hayek, has been that while the invisible hand of the market of has been paralysed, the state has been able to flex its muscles. The influx of funds from the EU (and lets call this what it really is - progressive economic redistribution directed by state institutions) has allowed public investment to rise as private investment has collapsed.

Furthermore, the PO government has maintained a relatively high (although not excessive) budget deficit and has not embarked upon a policy of economic austerity that is currently driving many European economies into a double-dip recession.

Yet, as Tusk reflects on his victory today he will realise that it may not be so easy for him during the next four years. The widening economic crisis in the eurozone is knocking on Poland's door and there are already signs of an economic slowdown in the country. The government is committed to quickly bringing down the budget deficit and could embark on its own austerity drive. Also, although it is unclear how much Poland will receive from the next EU budget in structural and cohesion funds, it is certain that the current wave of infrastructural development will slow following next year's European football championships. Add into the mix the possibility of a prolonged economic downturn in the eurozone – including perhaps in Germany - then the challenges for the Polish government are huge.

It should also be remembered that although PiS has lost another election it still enjoys over 30% of the vote. It may have retracted into its heartland and hardened its rhetoric but it is well placed to capitalise on any future decline in support for PO.

Unfortunately the same cannot be said of the left that is in its weakest position since the end of Communism. Another reason for Tusk to feel particularly self-satisfied today.

Tuesday, 27 September 2011

Poland revises plans on funds for railway sector

It has been pointed out in this blog how Poland has managed to maintain economic growth throughout the global economic crisis largely due to an increase in public investment spurred by an inflow of EU funds. It has also been noted however that the vast majority of infrastructural developments in transport have been concentrated in roads rather than railways.

There are signs however that the Polish government is considering reversing its decision to divert funds designated for railway development to road building. This is a welcome development and comes after sustained political pressure at a time when Poland holds the EU Presidency.

Below I reproduce an article from European Greens website (thanks to Greig Aitken for pointing this out)

According to reports, the Polish government has changed its mind about proposals to redirect €1.2 billion in cohesion funds from rail to road projects. The money will now be spent, as originally foreseen, on the modernisation and maintenance of existing rail infrastructure.

The Greens, who lobbied the Polish government on this issue together with EU transport commissioner Siim Kallas, welcome the decision. It's good news for the climate, rail transport in Poland and the credibility of European transport policy.

According to Green transport spokesperson Michael Cramer MEP, "Redirecting cohesion funds from rail to road would have set a disastrous precedent for EU transport policy and would have been a terrible signal to send in the context of the current Polish EU presidency."

"It is welcome that there was coordinated EU opposition to the original plans: funds that are approved for environmental-friendly railway projects cannot become subject to subsequent relocation to the climate-damaging road construction."

This is particularly good news for the Polish railway network which is in urgent need of funding. Poland is Europe's frontrunner in dismantling railway infrastructure with 25% of rail routes dismantled since 1990. Improving this infrastructure will aid transport not just in Poland but for the rest of Europe, in particualr the Baltic states. For Michael Cramer "Strengthening and expanding the connection between Bialystok in Poland and Kaunas in Lithuania has to be a top priority to ensure Baltic States do not remain disconnected from the European rail network".

Monday, 26 September 2011

Palikot - Humanities' Students Should Pay for their Studies

Janusz Palikot - who leads the liberal populist Palikot Movement - claimed in an interview in today's ' Metro' that those studying on Humanities courses should pay for their studies. And why? Because afterwards they will be unemployed.
I also have an idea for education. It can not be so that a philosophy student studies for free and an extramural student at a polytechnic has to pay. The governemnt should state that those courses will be free, which give someone a chance of finding work. Subjects such as business, biology, food-processing, mathematics, medicine and IT should be free. Those studying humanities should pay, because they end up unemployed.

There speaks the new leader of the left (sic)

Monday, 19 September 2011

Poland Takes Centre Stage During Eurozone Crisis Talks

With Poland currently holding the EU Presidency, it has taken centre stage over the past week as the debt crisis in the eurozone intensifies.

During a debate at the EU parliament last Wednesday, the Polish Finance Minister - Jacek Rostowski - claimed that the crisis in the eurozone threatens the break up of the EU itself. He went on to warn that such an event could result in the outbreak of war in the continent within a decade and that he is 'really thinking about obtaining a green card for my kids in the United States'.

Such claims may be over emotive and exaggerated, but they do reveal the fears felt about the break up of the European project in Central Eastern Europe and other poorer states in the Union.

On Saturday, Economic and Finance Ministers and the European Central Bank met in the Polish city of Wrocław to discuss the current EU crisis. The situation is deemed so serious that the U.S. Treasury Secretary Timothy Geithner joined the discussions. They were also greeted by a demonstration of up to 50,000 trade unionists, protesting against low wages and unemployment.

Opinions on dealing with the crisis range from increasing help for the so-called periphery economies and issuing eurobonds (alongside imposing further austeriy measures upon these countries) to allowing for the break up of the eurozone as these countries default on their debts. However, neither of these options addresses the fundamental problem facing the European economies today and at how this can be resolved. This can only be done through reversing the collapse in fixed investment that has accounted for the total economic contraction in Europe over the past couple of years.

The article reproduced below, from the website Key Trends in Globalisation, looks at this :

The international financial system is passing through the agony of a new round of the Eurozone debt crisis for the simple reason that European governments, like that in the US, refuse to deal with the core of the economic recession in Europe for reasons of economic dogma.

Anyone who looks at the economic data for the Eurozone without wearing ideological blinkers can see the situation at once – it is charted in Figure 1. The Eurozone recession is due to a collapse in fixed investment. Taking OECD data, at inflation adjusted prices and fixed parity purchasing powers (PPPs), then between the last quarter before the recession, the 1st quarter of 2008, and the 2nd quarter of 2011 Eurozone GDP fell by $204bn. But private consumption declined by only $29bn while the net trade balance increased by $32bn and government consumption rose by $91bn.

However fixed investment fell by $290bn – i.e. the recession in the Eurozone was wholly due to the fixed investment decline

Equally evidently, due to its scale, until this fall in investment is reversed it will take a prolonged period for the recession to be overcome. Therefore to restore growth, which by now is generally realised is the core to turning round the budget deficit problem, the fixed investment decline must be overcome.

Nor is there anything mysterious about how to do this – the state has entirely adequate means. To take the most decisive international case China made the core of its stimulus package direct state investment particularly aimed at infrastructure and housing – the result being that China’s economy has grown by over thirty per cent in three years.

Europe and the US clearly do not have the scale of state sector, nor the political willingness, to act on the scale China did. But US history shows that even without proceeding to a socialist scale of measures direct state intervention on investment is entirely possible.

Roosevelt expanded US state investment from 3.4% of GDP to 5.0% between 1933 and 1936 (data from US Bureau of Economic Analysis Table 1.5.5). Jason Scott Smith, in his study of New Deal public spending, summarises such investment as including 480 airports, 78,000 bridges, 572,000 miles of highway - which, in addition to its immediate effect in stimulating demand, reinforced the productive position of the US economy. Roosevelt, it is superfluous to point out, was neither a socialist nor a communist (despite claims to the contrary by the US right!).

Quarterly, up to date, data is regrettably not available on what is occurring across the Eurozone for state investment, but it is available for the US and there is no reason to suppose, with current policies, that the situation in Europe is any better. Between the peak of the previous US business cycle, in the 4th quarter of 2007, and the 2nd quarter of 2011 US private fixed investment fell from 15.8% of GDP to 12.2% - i.e. a decline of 3.6% of GDP. Yet in the same period US state investment did not compensate but also fell marginally – from 3.3% of GDP to 3.2% of GDP. Therefore while Roosevelt expanded the weight of US state investment current US administrations have been letting it fall.

Instead of directly addressing the core issue of the investment fall European administrations are either attempting to stimulate it indirectly – which, as it is ineffective, has led to fiscal/sovereign debt crises, or are acting via expansion of the money supply – which, in a situation whereby companies and households are paying down debt, is merely the famous ‘pushing on a piece of string’. The most favourable outcome of such a situation is that eventually the debt will be paid down, but only after several years of stagnation. The less favourable variant, of course, is that the banking system breaks under the strain and renewed recession is further propelled by fiscal cutbacks. All these problems simply arise from the fact that, under the rubric of the dogma ‘private equals good, state equals bad’, European governments refuse to use the state tools available to deal with the investment fall which is at the core of the Eurozone recession.

Some European politicians are now beginning to call for state measures to increase investment, UK Business Secretary Vince Cable being one. But the action they envisage so far is inadequate to deal with the scale of the investment fall.

China's economy, which does not have such ideological inhibitions, will continue to expand while the Eurozone remains relatively stagnant for a significant period - and as long as economic stagnation continues there will be no resolving of the Eurozone debt crisis.

Electoral Success for Latvian Centre-Left

The recent Latvian elections have resulted in the centre-left Harmony Centre gaining over 28% of the vote. This is interesting due to the fact that a large section of the Harmony Centre's support comes from the Russian minority that live in Latvia. It also raises doubts about the claims the Latvian policies of austerity have been a great success and an example to be emulated.

Below I reproduce an excellent article from the Socialist Unity website:

Yesterday’s election in Latvia is more than a curiosity for two reasons; firstly that Latvia has been the poster-child state for austerity, with political claims made that the Latvian population have supported huge spending cuts; and secondly that Latvia is one of the few parts of the former USSR to now be part of the EU.

Given the use of rhetoric about human rights by Western governments, the unconditional acceptance of Estonia and Latvia into the EU, despite the legal discrimination in those states against Russians, (and other ethnic minorities who use Russian as a lingua franca) is extraordinary. A full 16% of people domiciled in Latvia are denied a vote in elections, including many who were born there, and whose parents were born there.

In response to the 2008 recession, Latvia’s government made the decision to assume responsibility not only for the state’s sovereign debt, but also for the private sector debt of the banking institutions; and to protect the banks they launched extraordinary cuts in public spending. As Daniel McConnell in the Irish Independent reports:

A third of teachers in Latvia were laid off; the rest have endured savage salary cuts of up to 40 per cent, leaving them barely above the minimum wage.

Many have seen their pension entitlements slashed by 70 per cent; doctors and police officers face sacrificing a fifth of their pay. Many other key state services were severely curtailed including the cancellation of medical surgeries and closure of hospital wards in order to bring the cost of running the state into line.

According to an excellent study by Fine Gael TD Paschal Donohoe, which compares Ireland’s economy to other similar-sized European and Scandinavian countries, living standards in Latvia are well below those of Ireland and the EU average.

Despite the strong growth this year, unemployment remains high at 18 per cent but is falling.

The article in the Irish Independent quoted above is flawed by accepting the conventional but preposterous narrative that Latvia has somehow benefitted by these austerity measures. based upon the flimsy evidence that since its economy fell by a full 25% since 2008, and unemployment reached 22%, Latvia has more recently experienced a limited dead-cat bounce.

Robert J. Samuelson in the Washington Post had boasted that this limited recovery is linked to mass political support for what is euphemistically called “internal devaluation”, i.e. massive deflation of Latvia’s domestic economy and devastation of its civic institutions in the short term interests of servicing the debt:

What distinguished Latvia’s experience from our own is that, once people recognized the gravity of the crisis, they came together to support the necessary, if harsh, policies to stop the free-fall and restore stability. The economy is now growing again, and although joblessness remains horrific (16.6 percent), it is gradually declining. There is renewed hope. The government that presided over the punishing measures that brought about recovery was reelected last October with an expanded majority.

Yesterday’s election which reverses the 2010 result both burst the bubble of the myth that Latvians support austerity, but also reveals starkly the ethnic and linguistic divide in Latvian society which produced last year’s anomalous election result.

With regard to the economy, Samuelson is simply wrong. As Professor Michael Hudson argues:

The modest uptick in growth is primarily a consequence of Swedish demand for Latvian timber. Long-term economic prospects in the country, however, remain grim. … … let’s interrogate what Latvia’s “success” means? First, the banks are being paid. There has been no debt write-down. That would be an answer to the question previously raised of cui bono. Latvians are paying their private debts (largely to the Swedes, … helping to ensure that Sweden has faced no economic crisis). The cost, however, came at 25% GDP contraction of Latvia’s economy and public-sector salaries to driven down 30%, with unemployment from public spending cutbacks driving down private sector salaries.

Meanwhile, the Latvian public will have to bear the cost of this programme through the future debt payments required on the more than €4.4bn borrowed from the EU and IMF, which was required to keep its government running on life support during the crisis.

The Latvian solution’s defenders, however, argued that the economic contraction has ended and that modest growth has returned, with unemployment finally below 15%. But emigration has been part of the reason for the fall in unemployment, while investment in manufacturing and savings are far too low to return the country to robust growth. Unlike, say, Argentina, which rejected austerity, and saw its economy grow at 6% annually for six of the seven years following its crisis, Latvia shows no signs of posting such numbers.

… So, is Latvia on the way to recovery? Only time will tell, but the initial signs look very bad. Demographically, the country’s very survival looks in doubt. Economically, according the internal devaluation proponents, the country will have to export its way back to health. Yet, as the economist Edward Hugh has shown, only 10% of Latvia’s economy is from manufacturing, as opposed to roughly 40% for an industrialised economy like Germany’s.

Effectively, Latvia has become a colony for the EU, with the population toiling to service debt, but their real economy and social infrastructure disintegrating. Let us be clear, Latvians now have a standard of living (as measured by Parity Purchasing Power (PPP)) roughly half that of Greece, and only slightly higher than Belarus; and a large proportion of Latvians are now economically worse off than when they were part of the USSR.

This is the context where the 28% vote for the centre-left “Harmony Centre” party (Saskanas Centrs) must be understood.

Harmony have opposed austerity, and strategically opposes the discrimination which denies citizenship to almost half the Russian speaking population. Russians make up a majority of the population of Daugavpils, the second city, and over 40% of population of the capital, Riga; but many Russian speakers are not accepted as citizens in Latvia’s racist constitution. Remember that almost half of Latvia’s Russian population are denied a vote.

Latvian government statistics show that 630,380 ethnic Russians live in the Baltic state. Some 367,662 are Latvian citizens, and around 22,000 hold Russian passports. Another 235,908 people are neither Russian nor Latvian and are classed as “non-citizens.”

For example, Tatjana Zdanoka, the only Russian out of Latvia’s nine MEPs, (despite one in four Latvians being Russian). She gained citizenship in 1996, but only after a court battle, and the original rejection of her citizenship was on political grounds, because she had opposed independence in 1991.

The centre-left Harmony party now has 31 seats in the 100 seat parliament (Saeima), and to have acheived that they must have attracted votes from left inclined ethnic Latvians. But a pro-austerity coalition seems to have been swiftly stitched together between the so-called Reform Party, and the Unity bloc, the parties which came second and third in the election; they can probably also count on the support of the Latvian ultra-nationalists.

This is an extraordinarily volatile situation. In particular, the apparent electoral support for pro-austerity parties is a reflection of the racialised politics in Latvia; where support for Keynesian economic intervention has become associated with the Russian minority; and austerity is trumpeted by Latvian nationalists.

Friday, 16 September 2011

Wnuki Thatcher, Dzieci Blaira

My article in Polish about the riots in the UK was published in the latest issue of Le Monde Diplomatique (Polska Edycja):

Do Wielkiej Brytanii nie zawitała Arabska Wiosna. Nie były to nawet wydarzenia porównywalne z ostatnimi protestami w Atenach czy Madrycie. Te zamieszki nie miały pozytywnych celów politycznych, nie wysunięto żądań, nie przedstawiono programu. Był to wybuch chaosu.

Błędem byłoby jednak rozpatrywanie zamieszek w Londynie w całkowitym oderwaniu od wydarzeń w innych miejscach świata. Najpotężniejsza dekoniunktura gospodarcza w ciągu całego pokolenia doprowadziła do powstania całego łańcucha powiązanych wzajemnie zdarzeń, których przyczyną pozostaje spadający standard życia i rosnące nierówności. Kair, Ateny, Madryt, Londyn, a nawet Oslo – oto momenty, które zachwiały znajdującym się w kryzysie systemem globalnym.

Dlaczego jednak Wielka Brytania, i dlaczego teraz? Dlaczego w kraju, uznawanym często za opokę stabilności, zaczęło się dziać tak źle, że cały sektor młodzieży wyległ na ulice własnych społeczności, wszczynając zamieszki i dokonując grabieży?

Oto pytanie, na które nie chcą odpowiedzieć rząd brytyjski i jego zwolennicy. Premier David Cameron określił zamieszki jako akt czysto kryminalny. Uczestnicy zamieszek to po prostu kryminaliści i zbiry, a zatem rozwiązaniem jest zaprowadzenie prawa i porządku.

Uczestników zamieszek stygmatyzuje się i szufladkuje jako grupę pozbawionych moralności przestępców. Potem słyszymy jedynie wyjaśnienia, że w ich społecznościach panuje nieład moralny i kulturowy. Przyczynami ostatnich zamieszek mają być rozkład rodziny, samotni rodzice, brak dyscypliny i wreszcie rasa.

Prawica konserwatywna i jej przedstawiciele wśród intelektualistów wykorzystują zamieszki jako nowy pretekst do ataku na społeczeństwo wielokulturowe, obwiniając za wybuch przemocy imigrantów. Nawet wobec faktu, że w zamieszkach wzięła udział młodzież o wszelkim możliwym kolorze skóry, zrzucają odpowiedzialność za problemy na „czarną kulturę". Takie opinie pojawiają się nie tylko na marginesie skrajnie prawicowym, lecz wypowiadają je również „szanowani" przedstawiciele establishmentu w mediach głównego nurtu. Historyk David Starkey wprost zadeklarował w BBC, że biali uczestniczyli w zamieszkach, ponieważ są zainfekowani kulturą czarnoskórych. Oto jego słowa: „problem polega na tym, że biali stali się czarni" [1]. Każdy, kto ośmielił się spojrzeć choć trochę głębiej na problemy społeczne i ekonomiczne, spotyka się z oskarżeniem o usprawiedliwianie przemocy. Jednakże wyjaśnieniem przyczyn zamieszek pozostają głębokie nierówności społeczne i nędza, które przez ostatnie 30 lat stawały się wśród Brytyjczyków coraz powszechniejsze [2]. Prawda jest taka, że Wielka Brytania odczuła rezultaty potężnych nierówności społecznych, powstałych w czasie rządów Margaret Thatcher w latach 80. W ciągu owego dziesięciolecia przepaść między najbogatszymi a najbiedniejszymi 20% społeczeństwa wzrosła o 60%, w wyniku czego nierówności pozostają tu dwukrotnie większe niż w większości krajów Europy Zachodniej [3].

Nie dokonano tego pokojowo. Thatcher musiała zmierzyć się z zamieszkami na początku lat 80., gdy czarne społeczności zaprotestowały przeciwko bezrobociu i nękaniu przez policję.

Trwający przez cały rok strajk górników i zamieszki przeciwko podatkowi pogłównemu to kolejne przykłady niepokojów, za sprawą których Thatcher straciła stołek. Nie zniknęło jednak jej dziedzictwo.

Trudno jednoznacznie ocenić rządy Partii Pracy w latach 1997-2010. Za jej rządów wzrost gospodarczy był zazwyczaj wysoki, spadło bezrobocie i zwiększono wydatki na służby publiczne. Ów wzrost został jednakże w znacznej mierze osiągnięty dzięki polityce deregulacji finansowej, za sprawą której powstała niemożliwa do utrzymania bańka kredytowa. Gdy pękła, gospodarka Wielkiej Brytanii zaznała nie tylko recesji, lecz wręcz depresji. Co gorsza, nawet w latach wzrostu gospodarczego nie zmniejszyły się, a nawet nieco wzrosły nierówności społeczne. Gdy płynął pieniądz, rozwijał się rynek nieruchomości, a ludzie oddawali się szałowi zakupów, pielęgnowano kulturę konsumeryzmu i indywidualizmu. W 2007 r. liczba kredytów osiągnęła punkt krytyczny i domek z kart się zawalił.

Słynne jest powiedzenie Margaret Thatcher, że „nie ma czegoś takiego jak społeczeństwo".

To nie opinia, lecz projekt polityczny, którego konsekwencje okazały się tragiczne. Budowa kraju nierówności i atomizacji przez Thatcher i jej kontynuacja przez Blaira dały się we znaki dwóm kolejnym pokoleniom. Nie można się dziwić, że efektem nierówności społecznych i nędzy okazują się niepokoje społeczne. Nie dzieje się to jednak natychmiast – społeczeństwo doznaje wcześniej uszczerbku, a społeczności i rodziny ulegają korozji. Wśród 21 najbardziej rozwiniętych gospodarek na świecie, Wielka Brytania ma najgorsze wskaźniki dobrobytu dzieci, wypada też źle w przypadku ciąż wśród nastolatek, liczby więźniów, poziomu narkomanii, otyłości, braku mobilności społecznej i chorób psychicznych [4].

Zamieszki zaczęły się w Tottenham. Policja zastrzeliła młodego czarnoskórego, w kraju, w którym czarnoskórzy są 26 razy częściej niż inni zatrzymywani i przeszukiwani przez policję, a mimo pokojowych protestów rodzina zabitego nie otrzymała żadnych wyjaśnień co do przyczyn zdarzenia. Miało to miejsce w okolicy, którą cechuje wyjątkowo wysoki w skali kraju poziom bezrobocia wśród młodych. Zamieszki zaczęły się w okręgu, w którym ostatnio, w ramach 75% cięć budżetu na służby dla młodzieży, zamknięto kluby młodzieżowe [5].

Zamieszki rozszerzyły się z Tottenham na cały kraj, w którym trwa stagnacja gospodarcza, rośnie bezrobocie, a jedyną odpowiedzią rządu na te problemy pozostają oszczędności i cięcia budżetowe. W ostatnich miesiącach rząd zlikwidował zasiłek studencki (Educational Maintenance Allowance, EMA), zapewniający młodzieży z klasy robotniczej środki konieczne na podjęcie edukacji. Podniósł też czesne w szkołach wyższych, w wyniku czego każdy, kto zechce rozpocząć wyższą edukację, musi się liczyć z popadnięciem w dług rzędu 20 tys. funtów.

Zamieszki stanowiły wybuch chaosu na gruncie przygotowanym przez niesprawiedliwość, złość, brak złudzeń i wykluczenie. Są produktem społeczeństwa nauczonego, że jedynym wskaźnikiem sukcesu jest to, co skonsumujesz – zatem ich uczestnicy postanowili wziąć sprawy we własne ręce. To wszystko stało się w kraju, zbudowanym na nieuczciwości i chciwości. To tutaj bankierzy otrzymują nagrodę za doprowadzenie gospodarki do ruiny,

to tutaj przyłapywano polityków na machlojkach w ewidencji wydatków, to tutaj media (w przymierzu z policją i politykami) działają zbrodniczo i niemoralnie.

Cameron może sobie gadać o „wielkim społeczeństwie" i twierdzić, że „wszyscy jesteśmy w nim zjednoczeni". W rzeczywistości jednak polityka gospodarcza jego rządu oznacza cięcia wydatków na służby publiczne i społeczne, mające zapłacić za kryzys wywołany przez sektor finansowy. Całe społeczności, które cierpią już od dziesięcioleci wskutek zaniedbań, zdane są na łaskę i niełaskę sytuacji, w której brak widoków na lepszą przyszłość, nic nie daje nadziei, a za uczciwość i ciężką pracę nie sposób spodziewać się nagrody.

Wielu z tych, którzy wzięli udział w zamieszkach, zapełnia dziś więzienia i sale sądowe.

Znów porządek panuje na ulicach i trwa usuwanie szkód. Jednakże wobec pęknięć, które pojawiły się w społeczeństwie, jakiekolwiek długotrwałe rozwiązanie musi pociągnąć za sobą podjęcie problemu głębokich nierówności, które prowadzą do jego fragmentaryzacji. Lewica musi zaoferować program, w którym podejmie te kwestie, gdyż inaczej nie będzie w stanie przeciwstawić się tym, którzy pragną wykorzystać ostatnie zamieszki, by rozszerzyć swój reakcyjny i równoznaczny z dalszymi podziałami społecznymi pakiet propozycji.

tłum. Paweł Michał Bartolik


Gavin Rae – Socjolog, wykładowca w Akademii Koźmińskiego. Autor książki Poland’s Return to Capitalism. Prowadzi blog


[2] 41% of those convicted of taking part in the recent riots live in the 10% most deprived areas of England. (http://

[3] „Broken Society, yes. But by Thatcher", The Guardian, 29 stycznia 2011 (

[4] R. Wilkinson, K. Picket, The Spirit Level: Why More Equal Societies Almost Always Do Better, Allen Lane, Londyn 2009.

[5] „These riots reflect a society run on greed and looting", The Guardian, 10 sierpnia 2011 (

Wednesday, 14 September 2011

The Polish Green Party and the Upcoming Elections

An interesting interview in English with Bartłomiej Kozek from the Polish Green Party can be found here

Pensions Debate

Here you can read a paper on the debate over private pensions in Poland, which I presented at the ESPAnet conference last weekend.

The Rise of Liberal Populism

So is this election about to get interesting?

Well after a day of seeing the media obsess over the supposed hacking of the the PiS MP's - Beata Kempa - email account, it would seem not. Also, the painful sight of watching the left being represented by Leszek Miller and Aleksander Kwasniewski, as they stolled around Gdynia, was enough to put one off politics for life. But something may be stirring below the surface.

A current debate in Poland concerns the domination of Polish politics by four parties. The complaint is that these are the only parties that stand any real chance of entering politics, boosted by the large state subsidies that they have been receiving for years and their near total monopoly of media publicity. The programmes of these parties have essentially converged on many crucial issues and elections have become little more than a publicity show and popularity contest.

I have some sympathy for this point of view, although I feel that it is exaggerated and often used as an excuse by some to explain their own lack of political support. Nevertheless, the issue of how any real alternative could break the current status-quo is a complex one.

One person is currently giving it a go - Janusz Palikot - and according to current opinion polls his political movement (aptly named the Palikot Movement) has a chance of crossing the 5% threshold needed to enter parliament.

Palikot first entered parliament as a Citizens' Platform (PO) MP in 2005. He had previously made his name as a millionaire businessman and a representative of the Polish Confederation of Private Employers. Palikot has a taste for self-publicity and rose to prominence as a flamboyant MP who courted controversy and media attention. He brought the culture of political stunts and happenings into the political mainstream and sought to shock the audience and outrage his political opponents.

Within PO, Palikot took up the mantle of the leading advocate of liberalism. He rallied against the hypocrisies and reactions of the conservative right. He has stood up for such things as gay rights, liberalisation of the drugs law and the secularisation of the state and society. In the aftermath of the Smoleńsk tragedy, Palikot has come into conflict with those on the right who have sought to expand their conservative agenda. Sensing a political opening, Palikot left PO and formed a new movement that already boasts as many members as PO.

However, most of Palikot's gestures and activities are about one thing: himself. For example, his recent proclamation that Jarosław Kaczyński was responsible for the Smoleńsk tragedy may play well to his supporters in the gallery, but is just another example of how far the level of political debate in Poland has fallen.

Yet in this age of media centred politics, Palikot is beginning to make political ground on his opponents. The question remains, if his support does rise who will suffer as a consequence? Palikot's attempt to form a party ostensibly of the left, means that he represents a direct challenge to the SLD. After the gay activist, Robert Biedron, became a candidate for the Palikot Movement, then this challenge has become more direct. Palikot's proactive and overtly political campaign contrasts with the SLD's, which is dominated by the party's old-guard and its leader Napieralski's search for the next photo-opportunity.

However, the biggest losers from the rise of the Palikot Movement may be PO. Palikot is addressing much of his attacks against PO, claiming that they have betrayed their ideological roots and political base. His most recent stunt has been to erect tents (an 'orange city') outside the PM's office, protesting against the refusal of Tusk to debate with leaders of parties who are not currently in parliament.

Does the Palikot Movement represent a genuine alternative in Poland? A cursory glance at Palikot's programme reveals that despite its packaging, Palikot offers little new and combines cultural liberalism with extreme economic liberal policies. (An excellent article in Polish on this matter can be found here)

Palikot proposes to introduce a flat tax rate of 18% for Personal and Business tax and VAT. This would amount to a transfer of wealth to the richest sections of society and would further starve the budget of funds leading to more social spending cuts. Within his programme there is virtually no mention of social policy. The only proposal he has for creating employment is the fight against 'bureaucracy' and liberalising the labour code. He also wishes to raise the age of retirement, in a country that has one of the lowest employment rates in Europe and soaring youth unemployment.

The Palikot Movement represents a new strand in Polish politics: Liberal Populism. Previously the economic populism of the right had been combined with cultural conservatism. Palikot has harnessed the frustrations of a section of the middle class and promotes a mixture of cultural and economic individualism. He is winning the support of that part of the electorate who had placed their hopes in PO but feel let down by its record in government. He is also gaining votes from some of those who would traditionally support the left but are fed up with the SLD.

The dynamism and self-financing of his campaign give Palikot a chance of making a political breakthrough at next month's elections. Despite the fact that this may shake up the political scene, it would offer nothing progressive to Polish politics and further shift economic power to the privileged sections of society whilst further complicating the possibility of forming a real left alternative in the country. However, if the Palikot Movement continues to rise in the polls then the immediate consequence could be the weakening of PO, allowing PiS to make gains at next month's election. Already, the gap between these two parties is beginning to narrow in the opinion polls.