Return of the right

Sep 28th 2005
From The Economist Global Agenda

Poland’s voters have booted their left-leaning government from power after four years marked by scandal, infighting and fiscal wobbles. A coalition of conservative parties led by the little-known Kazimierz Marcinkiewicz must now try to get the economy back on track

ANOTHER election, another trouncing for the ruling party. Poland has had ten prime ministers since the country ditched communism in 1989, and it is about to get an eleventh. In the vote held on Sunday September 25th—the first since the country joined the European Union in May 2004—the rehabilitated communists who have run Poland for the past four years were given a massive thumbs-down by the electorate. Not for the first time, voters have put their faith in right-of-centre parties promising to give the country more economic oomph without sacrificing social stability.

The thumping rejection of the Democratic Left Alliance (SLD) comes as no surprise. The party swept to power four years ago as Poles turned against the policies of the previous government, which had its roots in the Solidarity trade-union movement. But the SLD administration has since been rocked by a series of scandals, leading to the resignation last year of the prime minister, Leszek Miller, and his replacement by a technocrat, Marek Belka. The SLD’s share of the vote has fallen to just 11.3%, the party’s lowest point since it was formed by repainted apparatchiks in 1990. That puts it behind not only the other mainstream parties but also Self Defence, a populist outfit run by a pig farmer, and only slightly ahead of the demagogic League of Polish Families.

More surprising than who lost was who came out on top. Until a few days before the election, the free-market Civic Platform had led the polls. But it was overtaken at the last moment by another right-wing party, Law and Justice. Jaroslaw Kaczynski, Law and Justice’s straight-talking leader (and until this week its presumed candidate for prime minister), managed to appeal to both those who want to grasp the opportunities that capitalism and democracy have created, and those who fear change. Civic Platform’s candidate, Jan Rokita, put off some voters in the latter stages of the campaign by appearing high-minded and arrogant—an image fostered by reports that his supporters had taken to calling him “Mr Prime Minister”.

However, Mr Kaczynski’s party did not do well enough to govern alone: with 27% of the vote, it must strike a coalition deal with Civic Platform, on 24%, to secure a majority in parliament. The two parties already have close ties, and even fielded joint candidates in some districts. Both have strong roots in the anti-communist underground. And both claim to detest the bloated cronyism that has flourished since the transition to capitalism.

However, in certain key respects they are uneasy bedfellows. Civic Platform has promoted a single rate of 15% for value-added tax and income tax, wants to shrink government and favours faster privatisation of the state’s remaining assets. Law and Justice opposes the flat tax, is sceptical about privatisation and, though it says it too favours a smaller state, has made expensive promises about fairness and social protection. And whereas Civic Platform wants to retain strict independence for the central bank, Mr Kaczynski's party wants to harmonise monetary policy with the government's programme for growth; on Tuesday, Law and Justice's candidate for finance minister said there was “no rational reason” for Poland's benchmark interest rate (currently 4.5%, a record low) to be higher than the euro area's (2.0%). However, the party is less keen than its prospective partner on going all the way and ditching the zloty for the euro. As in next-door Germany, the two biggest parties clearly have some tricky coalition-building ahead of them.

On Tuesday, Law and Justice announced that it had chosen not Mr Kaczynski but the little-known Kazimierz Marcinkiewicz to lead the next government. The reason for this surprising move lies with the upcoming presidential election, the first round of which is due on October 9th. Law and Justice’s candidate in the contest is Lech Kaczynski, Jaroslaw’s twin brother. Before the parliamentary vote he was trailing some way behind Civic Platform’s man, Donald Tusk, but his party’s strong finish has given him a lift. If Lech wins, however, Jaroslaw would find it difficult to be prime minister, since most Poles are queasy about the idea of identical twins holding the country’s two top jobs. So Jaroslaw has apparently decided to take a back seat, at least until the presidential race is decided. But even if Mr Marcinkiewicz continues as prime minister thereafter, few doubt that the party boss will be pulling his strings from the shadows.

Whoever ends up leading the next government faces two main tasks. The first is to restore credibility by showing it is serious about stamping out corruption; as the SLD learned to its cost, it is one thing to denounce graft, another entirely to tackle it successfully. The second is to put the economy on a sounder footing. Inflation has been brought down to low single figures, but some mutter that this has come at the expense of output. GDP growth picked up again last year, to 5.4%, but is expected to fall back to 3.4% this year—far below the tigerish rates, last seen in the mid-1990s, which Poland needs if it is to close the gap with its western neighbours over the next couple of decades. Worse, the unemployment rate is 18%, the highest in the EU, and the budget deficit remains stubbornly high, at 3.9% of GDP last year and 3.4% forecast for this year. Law and Justice will find it hard to keep those spending promises.

Against this backdrop, a coalition will not be easy to assemble. And judging from the past, it could prove short-lived. Since the fall of communism, the pendulum has swung between right and left in a succession of unstable coalition or minority governments. Each time, voters have become a bit more disenchanted than the last—the turnout on Sunday was 40%, the lowest since 1989. And yet, despite these political gyrations, the policies espoused by those in power have remained remarkably steady. None of Poland’s governments has completely turned its back on privatisation, deregulation or the EU. Nor does any such seismic shift seem likely.

Among the political elite—aside from the small parties on the far right and left—there is a consensus about Poland’s way ahead: in the EU but friends with America, and efficiency in government instead of corruption and incompetence. That, at least, is the theory.

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