Poland goes bankrupt?

My employer would disagree.

Do you mind elaborating? I find it hard to read your sentences.

The European Commission is pressing Warsaw for an efficient program of reducing its public finance deficit.

brussels-concerned-about-polands-deficit.

I for one would like to see what the next 10 days brings before commenting the actual state of the Polish Economy.

It will certainly come, just not before the election.

The problem is that about the only coalition that will deliver cuts is the current PO-PSL coalition. And with that, it's a guarantee that farmers won't be touched - yet it's the one area where they should be paying social taxes too.

I cannot see any way electorally to deliver the Thatcherite cuts that need to be made. And this is the real problem - the majority of Poles are fundamentally socialist.

My goodness you are thicko, aren't you?


I am guessing that your employment has nothing to do with economics.

Here, just for you and others who keep on spouting all this BS: warsawvoice.pl/WVpage/pages/articleFilm.php?id=14

Cuts? Are you kidding with 12% unemployment and wages that are the probably the lowest in Europe. If Poland goes bankrupt it's because the wages are too low. Low wages low tax base. Poland needs a vibrant Middle Class and you're not going to get that with low wages.

You really should look at the figures instead of buying into propaganda. which one of these is socialist?

UK:
Basic tax rate 20%
Higher rate 40%
top rate 50%
Main rate for corporation tax 27%
VAT rate 20%
Sovereign states by public debt rating 21
Insurance rate 12. 8%
rate of gov spending 47.3 percent of GDP
Overall tax revenue 38.9% of GDP

Poland:
basic rate 18%
top rate 32%
corporate tax 19%
VAT rate 23% standard rate and 5%/8% on food
Sovereign states by public debt 50
Insurance rate 13.71%
Rate of gov spending 43.3% percent of GDP
Overall tax revenue 34.9 % of GDP

Based on the above stats, I would note that Poland has a smaller public sector than the UK+taking into account that Poland still possess public assets that it can sell and is selling worth billions of dollars, and the UK does not Poland is in an infinitely better position.

As to the political appetite for reform, in Poland the government is currently undertaking pensions reform, in the UK the government wouldn't dare to mention the subject.

Socialists, which socialists?

Seems to me it is the UK that is in much need of a double dose of Thacherism, but given the strong class hatred prevalent in UK society, it is going to be very hard to achieve.

No slavic country will go bankrupt.There is always the russian bear behind.The only countries which will go bankrupt from the new ones are the non-slavic like Hungary,Esthonia,Romania etc.

Please stop polluting this thread with your rubbish.

Once the election is out of the way then the PO will find some other way to put off the required restructuring - some other election or waiting till after 2012 to avoid strikes during the matches or some other excuse. They seem paralyzed as to what they really need to do.

The deficit is not however something they inherited from the previous clowns - it has grown 3 times worse during their time in power ! Rostwoski is smart enough to know that things are going to go tits up if he continues like this but I'm not sure many of the rest of them understand economics - Grad, Tusk etc.

Meantime they have done nothing to really show their "pro business" credentials so I think they might struggle a bit at the next elections, still biggest overall but with an unconvincing mandate.

Despite all the doom and gloom the subscription rate for Polish bonds is still pretty high.

I will let your rubbish pop up.
With slavic countries there is a special problem that if they face financial difficulties they are more likely to move towards Russia and this is not a desired development.Hungary,Estonia,Latvia will never move close to Russia because they are deadly afraid.So they are more likely to get less help and face more problems.

I'm talking about the endless handouts to people such as farmers, the way that many individuals have been allowed to retire early (ballet dancers can collect their ZUS-funded pension at 40 - wtf?), the way that completely uneconomic train services are subsidised, the way that students get a hell of a lot of subsidies in terms of transportation, the list goes on.

Poland is screaming out for someone to make savage cuts in the same way that Estonia did/does.

The reform is cosmetic - it's doing nothing to change the fact that there are vast amounts of people enjoying state-funded early retirement. Taking a bit from the private pension scheme and putting it into the public scheme isn't enough - there's a huge black hole, and the only way to stop it is to put a stop to all those generous early retirement provisions.

Let's not forget that Poland also has a similar problem to the UK in terms of people falsely claiming unemployment/disability benefits.


Can't argue with that - the explosion in public sector non-jobs under Labour was shocking.


It's not paralysis, but electoral math. Who is going to support the reforms needed? The PSL will block any attempt to hit rural areas/farmers (KRUS, anyone?), PiS will oppose for the sake of opposition and the SLD are a self declared socialist party who want higher taxes to balance things - not cuts. It's virtually impossible for PO to do anything that's needed - even within PO, there are a few almost-SLD types who will rebel against cuts.

Something that people don't seem to understand is that the PSL wield massive power - Pawlak knows that solely by supporting PO's programme, they cannot dare to touch the PSL's voter base. So - what can be done?

I think we all agree that at the start of the crisis, the Government should have taken an axe to many things and allowed unemployment to rise. But if they did, the socialist Poles would have thrown them out very quickly.

Don't forget, look at the history of Polish governments from 1989. Not one government since then with the exception of the current one has been anything but socialist - and the current one realises that if they start taking an axe, then people will abandon them and vote for the SLD instead. PO simply don't have the numbers to actually do very much.

I'm curious - what do people think can actually be done, given the electoral math?

Exactly. First It was all Kaczynski fault, next presidential elections, next local elections... now parliamentary elections... f*ck, there are always some elections, If they had wanted to reform anything, It would have been done long ago. Especially that not all reforms are "socially sensitive", reducing bureaucracy, employment in administration, reforming justice system etc. but no, damn idiots increased employment in administration !!!


True. What's more, there was no recession in Poland (and not thanks to government idiots of course) and completely no reason to increase the deficit so much. It grew so huge because these idiots were increasing spendings ! The rise of teachers' salaries was the biggest ever !


True but It can change over night. A few articles, some comments from the rating agencies and that's it.

We are already in deep ****. ~8% of GDP public sector deficit with over +3% GDP growth (so it's not a recession thing) and billions from EU and from privatization (both temporary incomes) so the gap is terribly huge. They can either do nothing and we will be the next Greece in no more than 2 years or start very serious cuts and get us into recession as deficit reduction is good until It is by 1% of GDP a year, If more than that, the healthy comapnies living on domestic market will start bankrupting. I guess these are cuda the fools were promising.

You will not bankrupt because you have not opened yourselves too much.You will bankrupt when you increase investment in Ukraine and neighbouring countries,when immigrants come to Poland and immigrant Poles come back to Poland.

Not all reforms are socially sensitive? Even cutting public bureaucracy would have been met with huge outrage by Solidarity and the ilk - don't forget, the same people who are willing to use violence to achieve their aims.

Reforming the justice system? Easier said than done in a country where law professionals hold massive influence. Do you think that, for instance, lawyers want the system to be sped up?

As for increasing employment in administration - sorry to say, but the Polish public approves.


And you know why? Teachers had had enough of being paid peanuts, and the "rise" was partially eaten by the introduction of mandatory extra 2 hours a week anyway. If they didn't give teachers their raise, we'd have probably seen a strike - and then what?

But hey - paying people that educate our children well is a bad policy, huh?


Why would they if they're healthy?

We can only hope that things like Ciegelski will be allowed to go into bankruptcy and stop sucking up our cash.

Are you trying to be funny ? Why don't you open a poll on PF to see how many Polish citiznes here approve that ?


You seem to be no less populistic than your hero Tusk.


If tens of billions of public spendings disappear from year to year then many private companies in retail and especailly those in B2G sector i.e. supplyinig the army, working on public construction projects etc. won't make It despite being effective (good business plan, capital structure, sensible costs etc.) as there won't be enough time to adjust to new conditions, domestic demand gap will be simply too big to balance It with anything else. If you need to have such things explained, you should dare not to speak up in such discussions.


If the only goal of the ruling party is "let's win the next elections" It's a straight path to disaster and that's what we are witnessing now.

Approves my azz.Why do you think I am in the US?Because I am not going to finance jebanych urzędasów.

You are right that is going to come into force in the following months, especially targeting the police and the armed forces. And the great thing is from PO's perspective that they cannot strike(:

But seriously though looking into the future the situation looks really bright with PO likely to win a second term, and again drawing on the UK comparison-since that is the one I know best. The Conservatives in the UK will face an uphill battle to win the next election (it pains me to say), because they are prepared to undertake some of the cuts. Labour by contrast believes there is no need for these cuts, but can you believe what would happen if they had their way and th UK suddenly reversed its policy, the financial markets would start to panic!

Another problem is the fact the the UK recovery seems to very anemic, by contrast Poland is likely to grow by some 4.8%-5.2% this year, that is not bad at all as is likely to take some pressure of the government.

Surely winning the election should not the the purpose of their existence - the politicians are paid to manage the country and its finances. If they are only interested in their own jobs then it is similar to the UK I left in 1995 when the Tories were in their dying days.

There are plenty of govts that have been far more proactive in Poland than the current guys - - just in my time here I would say that Cimosiewicz, Buzek, Marcinkiewicz and (arguably) Belka all achieved far more reforms than Tusk who seems mainly interested in keeping TVN happy.

And yes some decisions will be unpopular but that is the problem with leadership - you cant always be everyones mate. I have no problem with the teachers pay. I also dont care about ballet dancers because there can only be about 50 of them and the only one I know was crippled when she was about 21.

What they could have done in the past 3 years "pain free"

- sell some of Orlen
- sell some of PKO
- sell some of their other bank stakes
- sell some of their KGHM stake
- started the pension reform earlier
- pull out of Afghanistan and just lent some token help
- start some work on the railways
- start some work on the roads when the EU funds were there
- cut bureaucracy for companies to stimulate employment
- done something with the miners

The problem is with the proportional representation system - every government in Poland since 1989 has had to worry about not only winning, but winning with enough of a majority. PO are in a terribly tough spot - the majority is against Tusk's ideology.


But what kind of reforms are we speaking about? The real problem in Poland - pensions being unfunded due to insane provisions still hasn't been tackled regardless of who was in power. Tusk did manage to take an axe to some, such as abolishing early retirement for teachers - but it's still not enough. The miners should certainly be top of the hitlist, but we all know that they'll come and smash up Warsaw if their generous retirement provisions are attacked.

Don't forget, PO have managed to push through some decent reforms on the very low level that didn't attract much publicity, such as abolishing the nonsense that was applying for a NIP. As far as I can see, there's generally been an improvement in the small things that aren't controversial.


And it goes back to the electoral math. Pawlak is a populist - if Tusk attempts to make a tough decision that will threaten the PSL, Pawalk will oppose it. We've seen this several times already - and the very base of the PSL, farmers - will simply not accept any attempt to abolish KRUS. PO just simply don't have the votes to get anything really Thatcherite through - look at how Palikot's movement and the PJN are stealing some support from them, along with the SLD.


The ballet dancers are the perfect example though - what sensible country would allow them early retirement when their profession is already subsidised to the hilt?


Pain free by who? Again, the electoral math comes into play - many people simply do not support the selling off of the "crown jewels". Even within PO, there are enough socialist elements that won't support the full-scale privatisation of state assets, let alone the centrist PSL.


All of these things generate profit for the government. Why sell off something that's profitable?


It would almost certainly have been vetoed by Lech if started earlier. Don't forget - many beneficiaries of early retirement provisions are PiS supporters.


Maybe. But again - many Poles have a rather misguided view that supporting America there somehow means that America will protect Poland from Russia.


This, I agree. The final nail in the coffin came with Komorowski promising 50% discounts for students - at a time when the subsidy should have been slashed. Either way, it was one fight that the Government should have picked - most people have no sympathy for railway workers. The railways really are lurching from one disaster to another - and I don't think any party has the answer. The only solution now is for some sort of broad party consensus - but I just cannot see the SLD and PiS agreeing to make most of them redundant.


It's getting there. But don't forget - Poles have some sort of fetish for this sort of thing. They whine and moan about bureaucracy, but then implement ridiculously bureaucratic systems within their own companies.


Forget about it. They're too much sentimental nonsense attached to them for any government to do anything about them - until Poles realise that Communism has gone forever, the miners will always succeed with their "but...what about when we protested and died for you?" nonsense.

I'm more convinced than ever that the real problem in Poland lies with the fact that the majority of people are secretly socialist, even if they swear blind that they aren't. When they finally accept it, then we can see high taxes to pay for it all. I'm not opposing it, but the current system of "we like socialist policies, but we don't wanna pay for it" just leads to UK style ruin.

For what it's worth, I can't see any electoral combination at the minute that would see real reforms being passed.


The majority clearly does, otherwise they wouldn't vote for socialist parties. Looking at the composition of the Sejm - about 60-65% are clearly socialists.


More like accepting that while you pay teachers peanuts, you'll get monkeys and little else. For every person entering teaching who has a vocation for it, how many useless, incompetent idiots are getting jobs in schools because they couldn't do anything else?


See also : Poland 1991-2005. It could actually be said that PiS were probably the only party in Polish history that didn't give a damn about winning the next election - and look what happened to them.

The proportional system in Poland produces populist governments. Minority administrations can work (it's worked very well in Scotland), but the history of Poland seems to mean that opposition members refuse to cooperate at all costs.


So why do they keep voting for parties which like large bureaucratic structures?

What do you mean?
I thought that is exactly what they are doing?


What amounts does this actually account for?
Many people I know say that pensions have to be slashed but can't give me any figures.

I don't think there any hard figures, unfortunately.

But you just need to look at some of the provisions to get an idea - police getting to retire after 15 years for instance. Given that the police tend to hire people with just high school education, that means you've got people of 33-34 walking around who are "retired".

It's very much my opinion that early retirement was used as a way to control unemployment in Poland.

Government should radically cut employment in administration, pull out all troops from abroad, cut all bureaucracy BS and make a rules simple!
cut taxes, more money with people ...


yeah, and generally infrastructure.....
governmental company's should be make efficient instead of selling them off for peanut !

Which will put unemployment up. The UK example shows that the private sector simply isn't able to absorb those made redundant from public sector jobs.


Where will Poland get combat experience then?


What country would you choose to emulate with this approach?

The UK, France and Germany all have bureaucratic nightmares. Even Switzerland, the most successful country in the world is a bureaucratic nightmare.


Where's the money coming from to fund tax cuts? Bush's tactic of cutting taxes didn't work so well, did it?


Bingo. Most Poles cannot agree on what to do with the Government's shareholdings - but the example of Polkomtel should tell you that Governments cannot run big business.

there is infrastructure to be build, I'm sure they will need workers for the task!


What for? First, Poland should implement sound defence, fighting irregular combatants for say 8000 soldiers will not be much of the help for Poland, those monies and resources could be used to further defence strategy.


simple -less taxes more moneys stays in man pocked !


Government? State can run some enterprises good enough !

Work on becoming energy self sufficient. Develop biogas from your agricultural sector, gasify your coal reserves. See what comes of your natural gas reserves. Work towards using gas for transportation fuel and heating. This will reduce costs of imported oil, thus keeping money in Poland.

Does Poland still have Chinese highway workers when Poland has 12% unemployment? If they do, that's criminal. Replace those Chinese with Polish workers. Poland needs the jobs.

Continue to work on infrastructure, roads, rail lines, etc. with Polish workers. If too expensive resurrect AK and make it a military project.

Rubbish - there has been next to no improvement that promotes business or makes things quicker. The application for a NIP is a one off extremely minor change. What happened to "One Window" or to Przyjasne Panstwo ? All the things I can think of in the past year have actually gone the other way.

If you can name 5 things that have saved me more than 10 hours or more than 1000 zlots that have been introduced by PO then I will send a bottle of Spiritus your way !

The other govts I mentioned faced far larger problems with a much more divided population - most of those guys have now disappeared from politics as a result but the country owes them a huge debt. PO's lasting achievement so far is create a huge debt !

One Window works fine here - although there's still the need to visit the Urzad Skarbowy on top of visiting the Urzad Miasta, it's a two second job. Certainly nothing to complain about - and it's not such a bad thing to have to visit the Urzad Skarbowy anyway, seeing as certain PKD codes require compulsory VAT registration - which the Urzad Miasta doesn't know about, because it's not their area of knowledge. The visit to the US is a checkbalance - no big deal.


And what else could they do, when the electoral math is stacked against them and with a very socialist population that will resist any attempt to cut their generous state subsidies?

I'm sorry, but I don't see much alternative in Poland - people wouldn't accept Estonian-style cuts. Remember, this is the country where railway workers go on hunger strike over a few redundancies!

The Chinese are light years ahead of the best and the brightest currently taking up space in Washington who tout wind/solar power and high speed rail as the best examples of American scientific achievement.

energyfromthorium.com/2011/01/30/china-initiates-tmsr/


Not when couple with higher spending.

this is a country where people have been screwed for far too long, what is your game eh?