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Vol 3, No 5
5 February 2001
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News from Poland News from Poland
All the important news
since 27 January 2001

Joanna Rohozińska



View today's updated headlines from Poland

Future not so bright

Prime Minister Jerzy Buzek may have to take back his promises that the EU will not be facing an onslaught of Poles flooding its labour market. The official unemployment rate topped 15 per cent, the highest in four years, and analysts are warning that it could go as high as 20 per cent unless fundamental reforms take place.

"Poland has two options: leave the status quo and allow unemployment to top 20 per cent and delay Poland's EU entry, or carry out deep labour and public finance reforms," said Krzysztof Rybiński, chief economist at ING Barings in Warsaw, adding, "If Poland resists strong pressure from trade unions and liberalises its labour market and wage policy... then the economy can return to growth rates of six to seven per cent."

The minority Solidarity Electoral Action (AWS) government announced it would tackle the problem by loosening a rigid labour code and cutting costs for employers. "A new offensive against unemployment begins today," said Buzek.

The offensive will have to include the restructuring of labour laws that impede job creation, such as high payroll expenditure costs, generous sick leave and three months' severance pay for most workers. Employers are also tied by high mandatory social security payments and 35 fully paid sick days per year for every employee. Analysts say that in order to boost economic growth and employment levels Poland must also reduce its minimum wage, re-train laid-off workers, improve education standards and lower taxes for job creators.

"High unemployment levels will also make it politically difficult for Poland [to] ease worries held by Germans and Austrians about worker migration once Poland joins the EU," said James Owen, economist at SG Bank Warsaw. On a visit to Warsaw, EU Employment Commissioner Anna Diamantopoulou stated, "You have important structural issues to address, with relatively high unemployment rates among young people, women and the less educated, significant long-term unemployment and wide variations in unemployment across regions."

Analysts are sceptical about the government's ability to carry out the necessary reforms. First of all they say its Solidarity trade-union power base ties the government's hands, which is not likely to allow for any drastic reduction in the protection level of workers. Drastic cuts could also mean political suicide ahead of parliamentary elections, due this October.

"We need to change labour regulations through tough discussions with trade unions, not through decrees by union members in government," said Jan Rokita, the leader of the liberal wing of the centre-right ruling block. "Today's offensive will be fruitful if it emancipates the government from trade union influence," Rokita said. "We hope that this is not just another discussion which leads to more discussions," said Henryka Bochniarz, the head of a leading business lobby group.


More numbers speak

The Main Statistical Office reported the GDP grew by 4.1 per cent in 2000 compared with the previous year. The economy expanded six per cent in the first quarter of 2000, slowed to 5.2 percent in the second quarter, and to 3.3 per cent in the third quarter of 2000.


Budget almost done

The minority ruling AWS bloc struck a deal with its estranged coalition partner, the Freedom Union (UW), to ensure sufficient parliamentary support for its proposed budget. The deal forestalled the opposition's (SLD) efforts to sink the bill, which would allow the SLD-linked President Aleksander Kwaśniewski to dismiss the legislature and move general elections up by several months and, in turn, sink the ruling government.

"The budget proposal is a reasonable compromise between the state's need and abilities," Mirosław Sekula, head of the Sejm's (parliament) public finances committee, told deputies. "Wednesday's debate puts the bill on track to meet the schedule for parliamentary work on the budget. The full legislature should pass on the measure to the President for approval on 6 March," he said.



Poland spends less on its defence needs than any NATO country. According to General Joseph Ralston, the NATO supreme allied commander in Europe who visited Warsaw on 23 January, this situation must change within the coming years if the country is to meet NATO standards. Ralston was formally in Warsaw by invitation of General Czesław Piatas, the chief of staff of the Polish Army and met with everybody who is anybody in the Polish government. During the press conference attended by both generals, Ralston openly criticised Poland's spending on the modernization of military equipment, stating that it markedly hinders Poland's ability to conform to NATO standards.


Give it all back

Senators voted 48 to 24 (with three abstentions) on amendments to the restitution law, broadening the scope of compensation to include former owners or their descendants who were not Polish citizens on 31 December 1999. The bill seeks to compensate the Poles whose property was seized by the Communist regime between 1944 and 1962. The Sejm had originally tried to limit compensation by making it conditional on the claimants' (former owners or their descendants) having held Polish citizenship both on the day of confiscation and on 31 December 1999, contrary to earlier government proposals. As a result, the bill is being sent back to the Sejm for further review.

Joanna Rohozińska, 2 February 2001

Moving on:


Gazeta Wyborcza
Prawo i Gospodarka
Zycie Warszawy
Polska Agencja Prasowa

Today's updated headlines from Poland

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