Monday, 26 March 2012

We Are The 97%

A recent opinion poll  shows that just 7% of Polish society supports the government's plan to raise the pension age to 67  for men, while only 3% agree that this should also apply to women. In other words, 97% of society do not agree with the government's attempt to increase the retirement age in Poland.

Despite not making it part of his election campaign, PM Donald Tusk announced his new plans to raise the age of retirement shortly after forming a government last year. The current retirement age in Poland is 60 for women and 65 for men. The government plans to steadily raise this from 2013, with it increasing by one month every four months (i.e. three months annually). This will lead to the retirment age for men reaching 67 by 2020 and for women 2040.

The government's plans to raise the retirment age are being presented as a necessity forced by demographic changes. A whole series of scary projections are being presented in the media showing the shrinking percentage of people of working age compared to those in retirement. For example, it is forecast that while in 2010 there were four people of working age for one Polish pensioner, in 2020 this will be three people, and in 2035 only two people. However painful these reforms may be, it is argued, we must act quickly before it is too late. You cannot after all argue with facts.

If it is such an obvious thing to do and there is no alternative, why is it that everyone is against it?

Whilst there needs to be an ongoing review of the retirement age as people live longer and society changes, the government's plans are understood by society as being unfair and one-sided. There indeed exists in Poland a serious problem regarding the amount of people who are working and not working, however this has many causes.

One of the contributing factors has been the huge fall in the birth-rate over the past couple of decades. The present fertility rate in Poland is just 1.3, amongst the lowest in EU and there are currently more people dying each year than there are babies being born.  The government has failed to address this issue through improving such things as maternity benefits and child care facilities. Poland has one of the lowest percentage of children attending nursery education inside the EU, with just 57% of children aged 3-5 going to a nursery (i.e. around 1/2 million children of this age do not have a pre-school education.) In these circumstances it is often grandparents (invariably grandmothers) who fill the gap left by the state and provide parents with childcare support. If elderly people are expected to work longer who will perform this social role?

In recent years Poland has also experienced a large wave of emigration, with millions of predominantly young Polish workers moving to Western Europe. Whilst a large number of these workers would like to return to the country, the lack of employment opportunities in Poland often prevented them from doing so. What is the government doing to readdress this issue? And furthermore if the government wishes to tackle its demographic problems, why is it not focusing on the extremely low level of immigration into the country?

One of the major problems, that underpins many of the country's demographic problems, is the huge deactivation of labour that has occurred since the collapse of Communism. As noted on a previous article in this blog:
In 1988 there were 21.8m people of working age and 18.2m of these, 83.5%, were in paid employment. 14 years later, when unemployment was at its peak, the number of Poles of working age had increased to 23.6m although the number of these working had decreased to 10.4m, i.e 56%. Around 1.2m of these were students meaning that around 9m Poles of working age were neither working or studying. During some years, throughout the past 20 years , unemployment has reached 20% - two and a half times the OECD average. The average rate of unemployment during the past two decades stands at 14.3%.
Whilst unemployment fell significantly following entry into the EU (partly due to the mass emigration of labour), it has since risen back to around 13%. This is still significantly below the pre-EU accession level but this relative success disguises another significant problem on the Polish labour market.

According to Eurostat, Poland has the highest number of workers employed on so-called 'junk contracts' - i.e. non-fixed, temporary contracts. Whilst the average percentage of workers employed on such contracts stands at less than 15% in the EU, in Poland it exceeds 27%. Furthermore, this has increased by more than five times since the beginning of the century, with just 5% of workers employed on these 'junk contracts' in 2000.  A report by the government 'Młodzi Polski,  revealed that over 60% of workers aged under 25 are employed on 'junk contracts'. This is further compounded by the large number of self-employed workers in Poland. 19% of all those working are self-employed, which is the fifth highest number in the EU after Greece, Italy, Portugal and Romania. Whilst a section of the self-employed have chosen to work in this manner and indeed suits their requirements, a large percentage are simply forced into creating their own 'company' as a means to find employment. 

All this means that employers in Poland are presented with the much sought after flexibility to fire and hire workers, reduce their pay and  increase their work burden. It also ensures that they are able to avoid many of the costs of paying social insurance that are required when workers are employed on permanent full-time contracts. For example, the self-employed usually opt to pay the lowest level of National Insurance, meaning both that they are destined to receive the lowest level of pension in the future and also that the National Insurance Fund (ZUS) is further starved of funds. National Insurance levels are presently set at a flat-rate in Poland, meaning that those forced out of the labour market and required to make ends meet through self-employment are paying the same level of National Insurance as large, profitable companies. An inevitable consequence of this situation is that a large group of workers simply opt out of the system altogether and operate partly or entirely on the black-market. This leaves them without any health or social insurance and further reduces the amount of money going into ZUS. 

And what is the government doing about this situation? You guessed it, nothing.

In these circumstances it is hardly surprising that Polish society is so opposed to the government's decision to prioritise raising the retirement age. The government is now completely out of touch with the realities of the working population. As the sociologist Julia Kubisa has pointed out the government regards work through its own narrow perspective: non-manual, not physically demanding and well paid. This contradicts the reality of millions of workers in Poland, with society aware of this discrepancy.

With the vast majority of society opposed to the government's plans, the trade union's have gone on the offensive. The Solidarność trade union collected over 1m signitures demanding a referendum on this issue. On Wednesday both of the main trade union federations, Solidarność and OPZZ, will be organising a picket outside of parliament as MPs debate whether a referendum should be held or not (the government is opposed to this option).

The issue of raising the pension age has caused a mini-crisis within the ruling coalition governrment. The junior partner - the Peasants' Party (PSL) - is reluctant to support the government's plans as they are so unpopular with its electorate. Citizens' Platform (PO) has already talked to both the Palikot Movement (RP) and the Democratic Left Alliance (SLD) about them supporting a bill to raise the retirement age. So far the SLD has, sensibly, expressed its opposition to the government's proposal. In contrast RP has made it clear that they support raising the retirement age, expressing very clearly how RP's self-declared left-wing credentials tend not to extend to socio-economic issues.

The proposal to raise the retirement age has created a new and serious divide between society and the present government. 

Tuesday, 20 March 2012

Faith in Funding

As politicians debate public spending cuts, the matter of whether the State should continue to fund the Church in Poland has been raised.

This issue is an extremely controversial one and brings in a number of wider issues, not least the fundamental question of whether there should exist an independent and secular State in Poland. The present debate also relates to a series of historical events, reaching back to the early Communist period.

Two things distinguished Communism in Poland from that in the rest of the Eastern Bloc. Firstly, was the continued existence of a large peasantry and the low level of land collectivisation. Secondly, was the relatively free and autonomous existence of the large Catholic Church in the country.

The present funding for the Church in Poland can be traced back to the early Communist period, when the Church lost a large amount of its land and property. This firstly occurred due to the geographical shift of Poland westwards, which led to the Church losing 260,000 out of the 400,000 hectares of the land it had possessed before the War. In 1950 the new Polish government nationalised the land owned by the Catholic Church and then set up a new Church Fund (Fundusz Kościelny) as means of compensation. Thus despite being deprived of much of its property and curtailed of some its rights, the Catholic Church was supported financially by the State and paradoxically enjoyed high social support particularly during periods of large opposition to the Communist system.

After the collapse of the Communist system, the relationship between the Church and State further changed. In 1990 the State widened its funding of the Church to include the subsidising of the social insurance of Catholic clerics and renovation of historical churches. In 1991 a Property Commission was established in order to return properties that were seen to have breached the existing Protocol at the time (e.g. anything smaller than 50 hectares.) The position of the Church was further strengthened following the signing of a Concordat with the Vatican in 1993. This meant that there could be no formal separation of the Church and State written into the new constitution (that came into force in 1997) and instead only stated that 'the relationship between the State and churches and other religious organizations shall be based on the principle of respect for their autonomy and the mutual independence of each in its own sphere'.

A proposal has recently emerged from within the PO government to significantly change this relationship. The Ministry of Administration and Digitalisation, led by Michał Boni, has proposed that the Church Fund is replaced by a voluntary tax payment of 0.3%, that will go to a Church or faith organization of the taxpayer’s choice. The Ministry estimates that such a tax should gather around 100m złoty a year, more than that presently provided by the Church Fund. 

On the face of it this seems like a logical and progressive development that could be supported by all sides. This, however, is not the case. Firstly, the proposal has only come out of a section of the government with the Finance Minister claiming he has no knowledge of it and the conservative wing of PO opposing it. Opposition to the proposal is loudest amongst Conservative Catholics outside of the government. Some are claiming that the abolition of the Church Fund breaks the Concordat and thus the Polish constitution. It is somewhat ironic to hear people who normally refer to the Communist period as one of totalitarian occupation to be defending an institution created under the Presidency of Bolesław Bierut. 

There is however quite another criticism of theproposal. The abolition of the Church Fund will only affect a very small element of the Church's funding. The Catholic Information Agency (KAI) itself has estimated that the public financing of the Church presently equals nearly 493m złoty a year (the analysis of the website actually puts this figure at nearly 2bn złoty). 

According to KAI, the Church Fund makes up 89m złoty of this total sum, whilst other expenditures include: 

- 221m złoty for Church universities
- 26m złoty for renovations of Church buildings
- 121m złoty through EU subsidies
- 3m złoty a year for chaplains in hospitals
- 20m złoty for Ordinates of the Polish army
- 2m złoty for chaplains in prisons
- 5.5m for Church charities.

A number of points should be made here. Not all this money is coming through the Polish state budget and furthermore not all of these funds are being provided to the Catholic Church (other religions also receive money.) Also, many of the institutions and activities of the Church (such as some of its educational and social programmes) play a positive role in society and fill part of the gap left by an underfunded state social welfare. system.  Nevertheless, it is difficult to justify the continual  huge funding of the Church by the government, particularly as taxpayers who are both believers and non-believers are essentially obliged to contribute to its maintenance.

Around 95% of Polish society are declared Catholics and around half of society regularly goes to Church. However, there is a trend amongst young people of moving away from the Church. This is partly being fuelled by the excesses of wealth and privilege displayed by many connected to the Polish Catholic Church. It is surely time for the Church to move to a situation where those who believe and practice are supporting its activities. This would not only lessen the financial burden of the State but potentially bring those who carry a faith to have more of a connection and influence upon Church that professes to represent them.

Thursday, 15 March 2012

Victimisation of Hungary

Ten days after the signing of the "budgetary pact", the European treaty which does not have the form to avoid public consultations, the mechanism of foolish and virulent sanctions, set up by Sarkozy and Merkel, is already at work. First victim: the Hungarian people that become "the example". Read more

Monday, 12 March 2012

Slovakia Turns Left (Interview with Lubos Blaha)

The Slovakian left won an historic victory in Saturday’s elections. The party Direction – Social Democracy (SMER – SD), led by former PM Robert Fico, gained 44,41% of the vote, giving them 83 out of the 150 parliamentary seats.

Below I reproduce an interview with Dr Lubos Blaha, a Slovakian political scientist who has become an MP after standing in the elections on SMER’s electoral list. The interview was carried out by the Ferdinand Lassalle Centre for Social Thought and first appeared on theirwebsite in Polish.

Michał Syska: What was the main topic dominating the election campaign in Slovakia? The economic crisis? Corruption?

The central issue was corruption, as the second Dzurindás government (2002-2006) was accused of huge corruption through the so-called ‘Gorilla affair’. The Liberal SaS was also mired in a corruption scandal, with the leader Sulik recorded meeting and speaking in a friendly manner about  internal political issues with  a Mafia-suspected businessman. After the Gorilla corruption case there was a wave of rallies against this model of representative democracy, which is full of corruption, and supporting more political participation and direct democracy. This was the very central issue of the campaign. SMER was lucky to be almost completely untouched by the corruption scandal, which primarily concerned the right-wing parties, especially Dzruindás SDKU-DS.

The second issue was stability. The Radicovás government was full of divisions and instability as it was made up of six coalition partners. It was obvious that such a right-wing coalition cannot be sustainable. SMER offered the prospect of a stable and strong coalition that would be able to offer solutions to people’s problems during a period of crisis.

The third issue was the economic crisis and the classic cleavage between a social democratic Keynesian model and a right-wing neoliberal one. It was concentrated on two issues: Firstly,  taxes - the left-wing SMER wanted to cancel the flat-tax rate and raise the taxes for the rich and the banks from 19% to 25%. In contrast the right-wing parties wished to sustain the flat tax and raise the rate of VAT, thus imposing a bigger burden on the poor. Secondly was the matter of economic growth and public investment. SMER was for public investment, such as the construction of highways through private-public projects (so-called PPP) which could drive  economic growth. The right-wing parties were against this and favoured policies of austerity.

The last issue was the EU, although this was a very marginal issue. Except for SaS and the National Party SNS, all the parties were for the European Stability Fund and all the new European measures designed to solve the debt crisis. Paradoxically, even SaS was not very vocal about this issue, which had been the reason for it breaking with the Radicovás governemnt in 2010.

It was very pleasing that the Hungarian issue was totally absent from the election campaign.

2) What was the main message of SMER during the campaign?

The key issues for SMER-SD were stability and social security, the policies against precariousness and the support for a modern social state. The crucial idea was that the poor should not be burdened by the raising of VAT as its effect is regressive. Rather, the banks (with its huge profits) and the richest in society (earning more than 33 000 Euro annually) should pay a tax rate of 25%. Also public investment was an important issue for SMER. Furthermore, the issue of reintroducing a more protective Labour Law was proposed, after the right-wing government introduced a typical neoliberal Labour Act, enabling, for example, management to fire employees more easily. This was a classic neo-Keynesian programme. SMER was also strong on the EU agenda and offered support for united EU solutions to the debt crisis.

3) What kind of challenges will the new government face?

The condition of the state following the Radicovás government is disastrous. Firstly, the tax office is not under control and there is a serious problem with collecting revenue. The state budget has been underestimated and the fiscal deficit will therefore grow automatically.
It is written in the Slovakian constitution (which was supported at the time by SMER) that the budget deficit cannot cross 3% of GDP. This could restrict the possibility of the government carrying out a Keynesian policy of public investment. It is most likely that the SMER government will have to introduce some policies of public spending savings. These will not however be as drastic or painful as those proposed by the right-wing parties. The trust in the political system after the ‘Gorilla case’ is very low and SMER has to be very careful in what policies it introduces. The turnout at the election was almost 60% and this therefore provides SMER with a large social mandate and legitimacy.

Sunday, 4 March 2012

Trains, Stadiums and Automobiles

Poland has suffered its worst train crash in over twenty years, after two trains were involved in a head-on collision in the south of Poland. Over 16 people were killed in the accident and another 57 lie injured in hospital.

The Polish media and political class have reacted as if to a national tragedy. PM Donald Tusk and three ministers were immediately on the scene. The news channels have been transmitting continual coverage of the incident, with newsreaders wearing black. Finally President Bronisław Komorowski has announced two days of national mourning.

This is of course primarily a tragedy for the people involved in the accident and the families of those who were killed and injured. However, there are a number of wider points that should be considered.

First of all, why do we react so strongly to a train accident, whilst accepting the far-greater number of people that are killed on the roads? This is probably due to the fact that train accidents are relatively rare and they therefore shock when they do occur. In contrast we accept the scores of people who are killed and injured in car accidents every weekend.

In 2011 there were around 39,400 car accidents in Poland in which 4,411 people were killed. This is 11% more than in 2010 and equals around 80 people every week, more than four times the number killed in this weekend's train crash. Over the previous few years the number of fatal accidents had been declining annually. The decision to raise the national speed limit most probably contributed to the rise in accidents last year. Despite the fact that around 213km of motorways were opened in 2011, the road network still remains grossly underdeveloped and overcrowded.

Despite this hypocrisy, there are serious questions to be asked as to how such a train accident could occur. Although the train system in Poland remains relatively safe, the number of accidents has increased in recent years. This is primarily due to the low level of investment in the system's infrastructure, with accidents only prevented due to trains having to run slowly in those areas where the infrastructure is in disrepair.

The disregarding of the Polish railway network has not only made it less safe and reliable but has dramatically reduced its size and density, pushing more and more people onto the roads. According to a Eurostat report:
'A particularly striking reduction in rail infrastructure was seen in Poland, where the railway density dropped from 84 km/1 000 km² in 1990 to 74 km/1 000 km² in 1998 and then to 65 km /1 000 km² in 2008. Data on regional rail infrastructure in Poland have been available since 1998. The most striking reductions between 1998 and 2008 were in Dolnoslaskie (down by 14 % to 88 km/1 000 km² in 2008), Lubelskie (down by 24 % to 43 km/1 000 km²), Warminsko-Mazurskie (down by 70 % to 50 km/1 000 km²) and Wielkopolskie (down by 46 % to 69 km/1 000 km²), compared with a decline of 13 % for Poland as a whole over the same period. Most of these regions had high-density networks in 1990. One exception is the Slaskie region, where the high-density rail network inherited has actually been significantly extended since 1998 (up by 16 % to 174 km/1 000 km² in 2008).'
Obviously the immediate cause of yesterday's accident is as yet unknown, despite some already claiming that it was due to 'human error'. Yet, this tragedy cannot be taken out of the context of the general decline and disinvestment in the Polish railways. This has immediately been recognised by those who work on them. The leader of the Solidarity railways' trade union , said:
The safety situation on the Polish railways is getting worse. The only thing that counts is money and not health or people's lives. As trade unionists we appealed for a change in this approach after previous accidents, but the situation did not change, which led to further tragedies.
Also the leader of the train-drivers trade union, Leszek Miętek, placed the general blame for the accident on the Polish railways' signal system

In Poland we have a signal system that is practically 100 years old. The only difference is that it is now operated electronically rather than mechanically. 
He goes on to note how this archaic system is reliant upon the train driver and that it does not sufficiently protect against errors caused by, for example,  tiredness. In this situation a mistake made by a train driver or signal operator can have fatal consequences.

In less than 100 days Poland will host the EURO2012 football championships. On Wednesday, there was much self-congratulation and back-slapping after the first football match was successfully held in Warsaw's new stadium. Despite the huge effort in building such stadiums around the country, the government has almost entirely neglected its railway network. Yet it will be on Poland's railways and roads that supporters will be travelling between these new stadiums. More importantly, those living in Poland are reliant upon these networks every day – before, during and after EURO2012.

It is a scandal that during a period of large infrastructural development in Poland, the lives and safety of passengers has been almost entirely neglected.