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CHAPTER I.

THE GOOD AND BAD SIDES OF THE TRANSFORMATION IN POLAND. THE STARTING POINT OF THE “GOOD CHANGE” REFORMS

 

 

“Hungary and Poland are two eternal oaks, each having grown a separate and individual trunk, but their roots, broadly spread under the surface of the earth, have been invisibly tangled and interwoven. Hence the existence and robustness of one is a condition for the life and health of the other”, wrote the émigré Polish democrat Stanisław Worcell (1799–1857). This, probably the most often repeated quotation about the links between our two countries, has found unexpected confirmation in events since the end of the Second World War. Worcell’s intuitions were backed up in a way by the famous researcher into the post-communist transformation in Hungary, Rudolf L. Tőkés. In one of his works he wrote: “Over the past 450 years, with the exception of the Horthy era in 1920–44, Hungary was either occupied or served as a political extension of foreign authorities. The imposition of foreign governments – Ottoman, Habsburg, Soviet – left behind a profound stamp on the culture, the value system and even the behaviours of both the nation and its elites”.^[1]

 

A similar observation may be made about Poland. Bearing in mind the fundamental difference in the time for which sovereignty was lost, our country was also “mainly occupied” or else, to a decidedly lesser degree than Hungary after 1867, “served as a political extension of foreign authorities”. The foreign influences resulting from the Prussian, Russian and Austrian partitions in the nineteenth century, followed by almost half a century of Soviet domination, left in the same way a profound stamp on the collective life of Poles and on the social behaviours of the nation and its elites.

 

Another feature common to both nations may be the process of emergence from communism, stretching over several decades. If we do not restrict our view of this process to the period of transformation after 1989, but take account of the changes that took place at a faster or slower rate under the totalitarian system itself, we may again notice Worcell’s “separate and individual trunks” as well as the invisible “interweaving of roots”. The plan and course of the growth of our national “trees” after 1945 would thus be an interesting jigsaw of similarities and contrasts. Beginning from the similar Stalinist models that existed in our countries up to 1956, we pass through the events in Poland in the summer and autumn of that year, which provided a powerful stimulus for the outbreak of the “1956-os forradalom”, then the far more tragic years of repression in Hungary against those who participated in those events, and in Poland the abandonment of hope for limited change in the system in the 1960s. Last but not least, there is the similarity in the attempts at centrally directed economic modernisation of the system and its gradual liberalisation. In Hungary these took place in the 1960s under the slogan of the New Economic Mechanism (új gazdasági mechanizmus) and led to what Hungarian political scientists would later call the “premature welfare state” (koraszülött jóléti állam);^[2] in Poland they took the form of a limited opening up to the Western economies in the 1970s, which also awakened Poles’ aspirations for consumption and better living conditions. The events of the last decade of communism in the two countries again diverged – in Hungary there was no large-scale challenge to the system like the Polish Solidarity movement; opposition was limited to relatively small circles of intellectuals.

 

The histories of the post-communist transformations in both countries, which will be referred to in many places in this book, also have many common features. Starting with the fact that the process began fairly similarly, with a political model based on a compact limited in its social reach to groups of the old elites and selected parts of the opposition (referred to by the Hungarian term kialkudott forradalom), through the implementation on a very similar time scale of a national reform strategy highly imitative of the West and founded on neoliberal ideas, up to the similar ambitious present-day projects of renewal and transformation of the state in the spirit of its own traditions. Although this book focuses on the achievements of the Law and Justice governments since autumn 2015, it also aims to make readers aware of the political and economic shape of our country after almost a quarter-century of transformation. This will make it possible to better understand the nature and scope of the changes made in our country, and also to compare the situation of Poland and Hungary in a rapidly changing world.

 

The political system in Poland – basic features of stability

 

The first experiences of the multi-party system in Poland, and the system of fully proportional representation in the lower house of parliament (the Sejm), led to significant fragmentation of the political scene. In the first fully democratically elected Sejm, in 1991, there were more than 20 different parties, and this largely determined the fate of the first cabinet formed in the postwar period by right-wing politicians – the government of Jan Olszewski. He did not survive in office for even the first five months of 1992. The Polish political scene was certainly given some stability by the introduction of electoral thresholds for the early election of 1993. An advantage of this measure was a reduction in the number of parties in the Sejm, which helped overcome permanently the problem of instability of governments and their difficulty in attaining an arithmetic majority. A problematic issue, however, especially seen from today’s perspective, was that in the mid-1990s a significant part of the fragmented right-wing electorate was deprived of parliamentary representation, while the system rewarded the then strong and well-organised post-communist parties. Some critics of the measures of the 1990s have noted that the maintenance of a proportional system still carries the danger that parties will become detached from their social base, and favours the creation of closed channels of advancement and elites that protect their monopolistic positions.^[3]

 

Cosmetic changes made to the electoral system and the way of calculating numbers of parliamentary seats, made in the late 1990s near the end of the term of the centre-right coalition led by Solidarity Electoral Action (AWS) – almost simultaneous with the first government of Viktor Orbán – did not fundamentally affect the stability of the political system. It only slightly increased the percentage support required by an arithmetically victorious party or block. Over the past 15 years, except for the 2005 election, which resulted in a coalition government lacking a parliamentary majority, all elections (in 2007, 2011 and 2015) have produced a stable majority. While in power, these majorities were not subject to significant shocks or processes depriving them of the ability to govern freely. The election of 2015 is a special case in this regard, as Law and Justice became the first party in post-1989 history to win an outright parliamentary majority without a need to seek coalition partners. It took 235 of the 460 seats in the Sejm and 61 of the 100 seats in the Senate.^[4] In spite of team changes – Beata Szydło’s replacement as prime minister by Mateusz Morawiecki in December 2017, followed by a reshuffle involving several ministries in January 2018 – the parliamentary majority formed after the 2015 election has proved stable and durable. Thus, similarly to Hungary, Poland has long been free of the problems that have dogged the Czech Republic, Slovakia, Romania, Spain, and – for many years – Italy.

 

In the Polish system there is also no fundamental dispute between the main parliamentary forces as to the shape of the parliamentary-presidential system. Direct elections of the head of state give the president a strong democratic mandate, and since 1990 have constituted a permanent and rarely questioned element of public life. There are doubts, however, as to the full effectiveness of the constitution adopted in 1997, at the end of the four-year term of the centre-left coalition of the Democratic Left Alliance and PSL, after being approved by a small majority in a national referendum. The governing majority favours changes to the wording of many of its articles, particularly those relating to the justice system, or even the adoption of a new constitution, as happened in Hungary in 2011. Due to the lack of the majority required by the Polish system (a majority of at least two-thirds of votes in the presence of at least one-half of the statutory number of MPs, and in the Senate an absolute majority of votes in the presence of at least one-half of the statutory number of senators), in the 2015–2019 term of office it has not been possible to introduce such changes.^[5]

 

Similarly, the activity of local government has generally been well received by Poles ever since the start of the transformation (the first local government elections took place in 1990). Local democracy favours increased civic engagement, and strengthens the identification of Poles with their regional homelands (which was weakened during the communist era). Skilful cooperation between central and local government, with the use of authorities’ own funds alongside EU subsidies, has led to great development in the infrastructure of towns and cities. It should be noted that in Poland it is rare for conflicts to be carried over from national to local government level, a relatively large number of mayors are not associated with the main political parties, and political opponents are often able to work together for the good of local communities.

 

For many years there have also been no forces in parliament questioning Poland’s geopolitical alliances, in particular its role in NATO. This is in spite of the fact that Civic Platform displays a growing tendency to treat Polish national interests and foreign policy as instruments for political purposes, and Law and Justice takes critical views on many aspects of the functioning of the European Union in its present form, the directions of its development and the role that the European project should play in the modern world. Against this background, the idea of close Polish–Hungarian cooperation is particularly enduring and well supported, in spite of the paradoxical fact that in previous European Parliaments, Fidesz belonged to the same political family – the European People’s Party (EPP) – as the Polish Civic Platform and PSL, which since 2015 have been in opposition.

 

Endurance of economic growth and macroeconomic strength

Poland is the leading European country in terms of consistent growth in national income since 1990. World Bank analysis shows that since the start of the transformation, the nation’s per capita income has increased almost sevenfold. Better results were achieved by only 12 countries worldwide (including China, Vietnam, Nigeria, Lebanon and Equatorial Guinea), none of them in Europe. In the same period the figure for Hungary increased almost 3.7 times over. In real terms, Poland’s figure rose from US$1,731 (in then current prices) to $12,500. However, this does not mean that Poland is the leader in terms of GDP per capita. Here, for instance, Poland still lags behind Slovakia by more than $3,500 and behind Hungary by more than $3,000. Nonetheless, Poland is in eighth place in the EU and 23rd worldwide in terms of total GDP in 2017, with a figure of more than $524 bn.^[6]

 

According to European Commission data, in 2018 Poland was the third fastest developing economy in the EU behind Ireland and Malta. This growth continues to be driven by high demand, private consumption and consumer confidence, and the effective absorption of EU funds allocated for public investment projects. Capacity utilisation in Poland also remains high. Higher economic growth is favoured by a reduction in the public financial deficit, which in 2018 stood at 1.4 times GDP. At the same time there is an increase in revenue from personal and business taxation, indirect taxes and social security contributions.^[7] The major rating agencies have for a long time issued positive forecasts of a growth in Polish GDP by more than 4% in 2019, along with stability in the banking sector.^[8] In the macroeconomic sphere, then, Poland enjoys optimistic growth expectations, placing it in a much better situation than many countries of the “old EU”, particularly those in southern Europe.

 

Since 2004 Poland’s exports – another driving force of the country’s economy – have more than tripled, and since 2005 it has maintained a positive trade balance with the EU, amounting to more than €200 bn in 2017. Since 2015 we have also recorded an overall positive trade balance. Incoming foreign investment, like other factors linked to the economic cycle, remains at a good level, reaching €13 bn in 2017. Since 2013 inflation has not exceeded 2.5%, and in 2014 deflation was reported for the first time since the Second World War.^[9]

 

Another positive result is the significant fall in unemployment. Since 2016 the unemployment rate has been in single figures (its previous growth was correlated with the global financial crisis and economic slowdown). In the third quarter of 2018, the Polish unemployment rate according to the BAEL survey was 3.8%, half that of the Eurozone. An outstanding challenge, however, is the relatively large number of people professionally inactive: more than 13 million, compared with just over 17 million professionally active. Since 2013, the percentage of people aged 15 and over who are professionally active has remained above 56%.^[10] Poland’s position remains significantly better than that of southern European countries, where permanent structural youth unemployment is an enormous problem, amounting to almost 40% in Greece and more than 30% in both Spain and Italy.^[11] In Poland in 2018 just over 10% of young people aged 15–24 lacked employment.^[12]

 

The most important problems

Subsequent chapters of this book will discuss the actions taken by the Law and Justice governments to implement reforms and to repair the state. The discussed areas of change will also fairly obviously draw attention to some of the forms of neglect or regression that characterised certain sectors of the Polish state before 2015. It is appropriate at this point only to indicate the most important overall problems that significantly hindered our country’s successful development.

 

One of the main challenges faced by Poland for the past decade and more has been lasting high (two-figure) unemployment and its structural and geographical nature (young people; former industrial regions and the neighbourhoods of communist-era collective farms), as well as problems related to the large numbers of Poles moving abroad. The effects of the large wave of migration following Poland’s entry into the EU are still visible on the jobs market and the housing market. According to data from the Polish Central Statistical Office (GUS) and Eurostat, in 2016 Poles made up the second largest group of economic immigrants (after Romanians), numbering a total of 2.36 million people. The situation is slightly different than in Hungary, where waves of migration occurred not immediately after the country’s entry into the EU, but only as a result of the global financial crisis, which hit Hungary hard.^[13]

 

During the eight years of the previous coalition of the Civic Platform and PSL, another serious social problem was the fall in public confidence in the state as an institution and in some of its departments. This was seen especially in the everyday operation of the state: the justice system, offices of central government, and local government (the last of these being viewed positively by Poles). People complained about the slow and ineffective working of the justice system: the long time taken to conclude cases, frequent changes in business and tax law, and the fact that the state was in reality cheated of taxes by many dishonest business people. The elites became increasingly alienated from the experiences of ordinary people, and came to be perceived as a privileged caste outside social and public control. The concentration of the vision of national development on large metropolises increased the feeling of alienation among those living in “Poland B” and suggested doubts in the lasting possibility of development of areas in the provinces. In many places a feeling of inviolability and impunity reigned among the local elites, while routes of public advancement based on meritocratic criteria were closed. Authentic grass-roots initiatives that sprang up in many parts of the country were not echoed in the public media or in the large commercial media. These, in turn, remained in the great majority of cases in the hands of foreign owners, and did not present the full range of views held across Polish society.

 

Another undoubted example of the weakness of the Polish state – irrespective of its direct causes – was the tragic Smolensk air crash of 10 April 2010, which caused the deaths of 96 leading representatives of Polish political, social, cultural and religious life, including the then President Lech Kaczyński. The deaths of so many prominent people, who were travelling to pay respect to the Polish officers murdered by the Soviet NKVD in 1940, and the subsequent evident lack of effectiveness on the part of the authorities in establishing the causes of the tragedy – one that was unparalleled on a European scale – caused millions of Poles to ask questions about the authority and effective power of the state and its position in European and global structures. They also demonstrated an inability to make use of the potential offered to modern politicians by technological, communications and legal capabilities and those resulting from membership of prestigious international organisations.

 

Similar questions were raised by the compliant attitude of the outgoing governing coalition in 2015 towards the German-promoted system of obligatory quotas for the acceptance of refugees, which significantly undermined the competences of member states and met united resistance from the other Visegrád countries. The equally passive attitude of Polish governments in the years 2007–2015 to the country’s dependence on Russia for energy supplies; the lack of a pro-industrial policy and the weakness of the modern cooperative system in the economy; abandonment of the Solidarity movement’s basic ideology of combating of evil with good; indifference to the benefits to be gained from a civic and national community, and at the same time the threats resulting from weakening of the traditional Christian roots of Poland and Europe; general acceptance of left-liberal ideas of eliminating separate identity and behaviours – these were among the reasons for the electoral defeat suffered by the liberal camp in autumn 2015 and for the beginning of the process of dynamic “good change”, which aims to make Poland aware of its value and potential as a country lying at the heart of Europe.