Monday, 25 June 2012

Taking The Positives Out of Euro2012

Recently I got into a conversation about Euro2012 with someone who is, well let’s say, from the other end of the political spectrum. It turned out we both had gripes about how our respective political camps were interpreting Euro2012.

Her main complaint was that some elements of the conservative-right in Poland were criticising Poles for only bearing the flag and expressing their patriotism during a football tournament and not during national days of patriotic celebration. She pointed out that this was a narrow-minded approach and that they should instead welcome this mass display of national pride. 

On the other hand, I expressed my dismay that many on the left were only pointing out the negatives of the tournament. They portray Euro2012 as a celebration of nationalism, commercialism and misogogony, that wastes billions of złoty that could have been spent on more worthwhile projects (this latter point I have already made myself) and ignores the huge social and economic problems building in Poland.

I will leave aside the debates occurring on the conservative right (I have no real knowledge or concern for these) and consider what should the attitude of the left and other progressive forces be to Euro2012. Debates about whether the tournament should have been organised or not are now a thing of the past, the point presently is whether anything positive can be taken from the experience. 

As the tournament enters its final week we can first of all say that Euro2012 has been a success. This is not just the opinion of the media or elite but a feeling that runs through the vast majority of society with 88% of Poles positively assessing the decision to jointly organise the tournament with Ukraine.

I believe that there are two main outcomes of Euro2012 that the left should welcome and seek to build on.

Anti-Racism and Multi-Culturalism

Euro2012 opened shortly after the broadcasting of a documentary by the BBC that reported the existence of racism in stadiums in Ukraine and Poland. It was accompanied by leading black former footballers claiming that they and their families would not travel to Poland or Ukraine as they feared racist attack and abuse.

I have mixed feelings about this programme. On the one hand it was good that the media displayed how racism does exist in some football stadiums in Poland and Ukraine and opened up a debate on this matter (a topic that has largely been ignored by the domestic media.) However, the programme was so one-sided that it gave the impression that the stadiums would be full of rabid racists hurling abuse at black players and attacking fans of different nationalities and races. This could not be further from the reality of Euro2012. 

As  I left Warsaw’s fanzone after watching a game last week, I  overheard an exchange between two Polish fans. ‘The problem with the BBC documentary is that they didn’t show things like this’, was the gist of their conversation. It’s a sentiment that has often been expressed and one that reflects a frustration amongst the 99% of Poles who have embraced the spirit of Euro2012 as one of openness and diversity.

In the 15 years that I have lived in this city I have never seen it quite like this. The streets are full of fans and tourists, with people of different nationalities and races intermingling and celebrating this festival of football.

There is of course a problem of racism and xenophobia in Poland, as there is in Ukraine. It is true that racism can sometimes be expressed openly, including on the terraces of football stadiums, in a way that is no longer acceptable in countries like Britain. However, Euro2012 has shown that these are the actions of a minority (often connected to the far-right) and can be marginalised as they are seen to be unacceptable by the majority.

This is not helped by those in Western Europe portraying countries like Poland as being hotbeds of racism. This is particularly hard to swallow in countries that have never had histories of colonial conquest, never participated in the slave trade and have not built their economies on the exploitation of immigrant labour.

It is also difficult to accept the tone of superiority of those from a country that has its own fresh experiences of racism in football. This does not end with the convictions and allegations of racism on the pitch made against leading Premier League and English national team players last season. It extends to the racist and Islamophobic English Defence League, which is organised around football hooligan groups that now terrorise on the high-streets instead of in the stadiums.

The problem of the far-right also exists in countries like Poland and Ukraine. Beyond the newly developed stadiums and corporate fanzones, lie some deep pockets of poverty and social exclusion. The process of deindustrialisation and its subsequent high unemployment and social inequalities have created fertile breeding grounds for those seeking to spread their message of hate. 

These countries have at times in their history been isolated from other parts of the globe and once opened up to the West have tended to experience large emigrations. These are not multi-cultural societies in the western sense and this has bred a racism built more upon ignorance than that of superiority that is common in the ex-colonial centres.

Euro2012 has gone some way to opening up Poland to other cultures and nationalities and has dismantled many stereotypes of Poland and Poles from those visiting the country. It has been almost amusing to watch the supporters from various countries falling over themselves to become friends of Poland, seeing who is able to sing loudest the Polish chant ‘Polska Biało-Czerwoni’.

The State can be Effective

The second major success of Euro2012 has been the example of how the state can be an effective instrument in socio-economic life. For more than two decades the ideology has been propagated that the state is inefficient, wasteful and bureaucratic and that the private sector should replace it. This has become a self-fullfilling prophesy as successive governments have starved the state of resources.

Euro2012 has dispelled this myth and shown that the state can be a successful and efficient investor and organiser. It has been public investment organised by the state, using national and EU funds, that built the stadiums, roads, railways, train stations, fanzones and transmitted the matches on national television. Yes, we can argue about whether the money should have been spent better elsewhere, but now this has been done be we should be pointing out what successes can be gained by the state coordinating its activities around a clear project that is supported by the majority of society. Most crucially the left should be underlining that it is only by the state furthering its investment, that the Polish economy can continue to defy the recessionary pressures building once again in Europe.

An efficient well organised and active state that exists alongside and open and tolerant society? Well we can dream, but Euro2012 has taken us a small step further towards this goal and this at least should be welcomed. 

Thursday, 7 June 2012

Euro2012 - Poland's Wasted Investment

‘Bah, Humbug’ I hear you cry. Just as Poland and Ukraine take centre stage in hosting the Euro 2012 football championships yet another negative article is written to spoil the fun. Well let me set one thing straight. I am actually looking forward to Euro2012, that starts this Friday when Poland plays Greece in Warsaw. I like football and I will enjoy the spectacle. Already you can see Warsaw filling up with people of different nationalities and races. This can only be a good thing and takes Poland a step further towards becoming a more open and cosmopolitan country. I also welcome the fact that Poland has embarked on a course of large public investment in its infrastructure in recent years, which as often pointed out in this blog has helped it to repel a recession despite the continuing global economic crisis.

The main point however is not whether the championships will be a success, whether the fans will enjoy themselves or if it will help enhance Poland’s reputation globally. I’m sure all of these things will happen. The major concern is whether Poland has actually wasted large sums of money on investments which could have been wiser spent and some of which could actually have a negative future impact on the country’s economy. 

When it was first announced that Euro2012 would be held in Poland, the government declared a series of planned investments. These included the construction of 900km of motorways and 2,100km of express roads, the modernisation of 1,556km of its railway infrastructure, enlargement of 8 airports and construction or upgrading of 6 football stadiums.

Just prior to the tournament PM Donald Tusk has announced that the government has completed around 80% of its planned investments. Yet experts point out that while the government has largely been successful in carrying out its plans for airports and stadiums, only around 40% of its original planned road and 50% of rail investments have been completed. The government has obviously moved the goalposts (excuse the pun) and now refers to its later more modest plans that had been drawn up once it was clear that it could not meet its original obligations. 

Yet despite these shortcomings one cannot dispute that the Polish government has helped to carry out a series of public investments in its infrastructure at a level not seen since the 1970s. As the head of the government organization (PL.2012) that is coordinating preparations for Euro2012 in Poland has pointed out, during the past four years investments worth ZŁ70bn have been completed. According to their estimates such  a programme would normallyhave taken at least 8 years to complete.

Despite these achievements one fundamental point stands out. In the present EU budget (that runs from 2007 to 2013) Poland has been liable to receive the largest sum in structural and cohesion funds of any EU member state. This equals €67bn, which rises to 82bn once the amount that the Polish government is able to spend on top of this sum is taken into account. Yet, not one extra euro has been made available for Poland’s hosting of Euro2012. This means that a large amount of the EU funds that Poland can gain access to has been spent on preparing for these football championships.

An analysis of the breakdown of investments in preparation for Euro2012 shows that 75% of the money has been spent on the country’s roads and just 11% on railways. Now, there is now doubt that in the country with the highest amount of road accidents inside the EU  that there is a serious need for investment in its road infrastructure. However, this has been done at the expense of a similar programme of investment in the railway network, which is severely underfunded, in disrepair and becoming increasingly unsafe. It is also questionable whether such a large proportion of the country's public investment should have been concentrated in four of the largest and wealthiest cities in the country. 

The building and modernisation of stadiums has meant that Poland now has sports facilities that rival those in other EU countries. However, how viable will it be to maintain these once the tournament has finished? It is hoped that by co-hosting Euro2012 and developing the country’s stadiums that the popularity of football will grow in the country and attendances rise. This may well be true, however presently the amount of people attending football matches in Poland is relatively very low, equalling just 0.17% of the population on match days. As a comparison this reaches 0.35% in the Czech Republic, 0.40% in Italy, 0.47% in Germany, 0.61% in Spain, 0.70% in England, 0.75% in Portugal and (an incredibly high) 1.61% in Scotland. 

The fear exists that after Euro2012 the local governments in cities such as Warsaw, Wrocław and Gdańsk will be left with the responsibility of maintaining stadiums that are under used, bringing a huge financial burden to these local municipalities. This has been the case in Portugal, that hosted the Euros in 2004 and spent over €600m building and developing its stadia. These now often stand ¾ empty during league games and facing its own financial crisis a discussion has opened in Portugal as to whether these stadia should be demolished to ease the pressure on local governments. 

This is not the only financial cost that has been placed on local governments, who have had to invest large sums of public money in preparation for the Euros. In cities such as Gdańsk, Pozńan and Wrocław the level of public debt is already approaching the limit beyond which they would have to declare themselves bankrupt . Furthermore, the central government has been placing increasing pressure upon local authorities to decrease their spending and levels of debt, although it is these authorities that co-fund the majority of EU investment projects. This has meant that local governments have begun cutting spending in other areas in order to enable them to pay for hosting Euro2012. For example, in Warsaw the local government has increased spending on promotion from ZŁ35m last year to ZŁ60m this year, whilst for example spending on subsidies for theatres has been cut by ZŁ10m . The cost for the four local governments, where matches will be held, for building its fanzones equals ZŁ45m. All of this is being done at a time when local governments around the country are closing schools, privatising school canteens and reducing spending on essential services such as housing that are grossly inadequate for the needs of the population.

There are also a number of problems relating to the fact that many of the investment projects have been rushed in order to be ready for the championships. A number of experts have expressed concern that the quality of many of the roads that have been built is insufficient and that these will have to be repaired or redone in the future. Furthermore, some of the companies that have built these roads now face severe financial difficulties and even bankruptcy. Already the company DSS, that built one of the main motorways (A1) in Poland, has gone bankrupt. Also the main company responsible for building roads in Poland (and which also is a leading investment company in the energy sector), PBG, has filed for bankruptcy. Why is this the case? Well, in order to win these tenders companies were compelled to reduce their price to a minimum, often to a level that was not financially viable. These companies have then not been able to meet their obligations to suppliers, contractors, etc. It is estimated that the outstanding obligations of DSS equal around ZŁ35m. The situation is even more serious for PGS , as it possesses loans from banks worth ZŁ1.7bn.

This does not mean that nobody is making a profit out of Euro2012. One of the major beneficiaries will of course be UEFA, that organises the Euros. Scandalously, UEFA has negotiated an agreement with the Polish government that it and its associated companies will not have to pay any tax on its earnings gained in Poland during the tournament. And the good times are not restricted to UEFA, but are also being enjoyed by those running Poland’s football association (PZPN). The PZPN has itself been submerged in a series of scandals in recent years and has failed to address in any serious way the problem of racism in stadiums. Yet those running the organisation have seen their salaries rise significantly recently. For example just a few years ago the President of the PZPN earned the very good salary of ZŁ20,000 a month. Yet the President now has two full-time contracts and earns a joint monthly salary of ZŁ80,000, whilst other leading figures in PZPN have managed to gain incomes of ZŁ50,000 a month. It should be born in mind that the average monthly income in Poland is around ZŁ3,400.
The fanzones organized on the insistence of UEFA will also be large commercial jamborees, sponsored by the usual suspects: Carlsberg, McDonalds, MasterCard, etc. The beer served will of course be just Carlsberg (yuk) and in Warsaw’s fanzone – that will hold up to 100,000 people – the largest McDonalds in Poland has been constructed (whoopee). It has been practically impossible for the average resident in the cities hosting the games to get tickets for the games and it will be mainly the large international companies that will be making the most profits from them.

My prediction is that Euro2012 will on the surface be an enjoyable and exciting event. Yet, it is also one that has not been organised with the best long-term interests of the economies and populations of the countries holding these games in mind. UEFA and their associated guests will leave happily with their coffers further swelled as they anticipate their next payday in France 2016.

For what it’s worth I predict that Poland will be knocked out in the round after the qualifiers, that England will fail to qualify from their group and that Germany will win the tournament. Then again what do I know.

Monday, 4 June 2012

Poland: the dark side of growth

An article by Piotr Ikonowicz on the growing economic difficulties facing Polish society has been published by the Green European Journal:
With one of the highest growth rates in the European Union, the Polish economy seems to escape the crisis. But there is another side of the coin. The Polish are working more and more but earning less. This is the result of a practical obligation to systematically work overtime during weekends and the impossibility of taking annual leave. But what is the social impact of this inequality? Read More....