Poland Fooled By the Populist Law and Justice

On October 25, 2015, parliamentary elections were held in Poland. After eight years of domination by the center-right Civic Platform party, the right-wing, populist Law and Justice Party has been given an electoral mandate. These parliamentary elections may well be remembered as the catalyst for the rollback of progressive reforms achieved by Donald Tusk and his open-minded, pro-European friends.

Since 2007 when Tusk formed his first government, the Civic Platform Party has worked toward advancing the role Poland played in Central and Eastern Europe as well as in the European Union. The success of Tusk’s party in the spheres of international diplomacy and relations with neighbors such as Germany cannot be questioned. Not only did the two center-right cabinets improve Poland’s image among European peers, but they also worked heavily on close co-operation with the European Union. Engagement of the top Polish politicians with the EU was made possible by discarding the ignorant and narrow-minded international policy of the Kaczynski brothers – Law and Justice members who led Poland prior to 2007. By improving ties with Angela Merkel, the Chancellor of Germany, Tusk brought Poland closer to its western neighbor in a quest to overcome the historical antagonism that Poles have felt regarding the German people. Avoiding derogatory statements about other countries in official speeches and other embarrassments during official visits, missteps very typical of the Kaczynski brothers, allowed the Polish politicians to be taken seriously by the European leaders and resulted in improving the reputation of Poland worldwide. The ultimate reward that Poland recieved for pursuing the path of open-minded international policy came in two forms. Firstly, the nation became more integrated with the European Union allowing it to reap more benefits from market integration, by extension reducing Poland’s political dependency on states such as Russia. Second and most importantly, Poland was given the opportunity to take on more leadership within the EU, which was confirmed by the appointment of Tusk for the President of the European Council.

Besides increasing the political leverage exercised by Poland in the international arena, the Civic Platform guided the national economy with unparalleled soundness and integrity. Tight fiscal policy with no unnecessary spending on large pension plans and unemployment benefits enabled Poland to tolerate the financial crisis of 2007-08 relatively unscathed. Increasing the retirement age to 67 years from 60 and 65 years, for women and men respectively, although a politically unpopular decision, was definitely a sound policy from an economic viewpoint. As the newly-elected President Andrzej Duda from Law and Justice along with the majority of the new Parliament want to lower the retirement age again, the progress made by the Civic Platform will, unfortunately, be lost. Also, more importantly, fulfilling the numerous promises extended during the political campaign of Law and Justice would impose a strain on the currently healthy budget of Poland. As with every version of populism, the one presented by Law and Justice is potentially costly, unsustainable and devoid of benefit save the short-term happiness of Polish citizens who may later realize that the party has made a habit of creating budget deficits.

So, what we can expect from the new rule of Law and Justice? Surely, increased taxes for the richest, ample nonsensical fiscal spending on unemployment benefits, and other instruments designed to promote income equality instead of meritocracy will become ubiquitous. As a consequence of the unbalanced economic policy to come, the macroeconomic conditions of Poland will be likely to worsen driving the business away from Warsaw and other Polish cities. The cost of debt will increase, money will be spent on promoting socialist ideas rather than investing in new infrastructure, and the largest, state-owned companies such as KGHM, PKN Orlen and PGE, will likely become governed by unprofessional political appointees rather than business exectutives. All of this is likely to be accompanied by a decrease in Poland’s political leverage on the international arena, continuous political embarrassment and destruction of relations with Poland’s closest and most powerful neighbors: Germany and Russia. All in all, the progress established by the Civic Platform is, unfortunately, to be rendered irrelevant. Hopefully, the Polish citizens will stop dreaming about socialist utopia offered by Law and Justice and choose to follow incentives more well-considered than “social progress” in the next elections.