Polish politics. Miller’s crossing

Date: 24/01/04

Poland's prime minister is under pressure at home and abroad

THE gods smiled on Leszek Miller, Poland's prime minister, when his helicopter crashed near Warsaw in December. Feeling, he said afterwards, “the touch of angel wings” around him, he survived the impact with minor back injuries, even making a brief appearance in a wheelchair at a European summit in Brussels a few days later. This week he emerged from a month's convalescence, marking the occasion with a reshuffle that included sacking his treasury minister. He pronounced himself a rested and refreshed man. He needs to be, given the challenges facing him.

One recent poll has given Mr Miller's ruling socialist party, the SLD, only 17% support among voters - well behind the leading conservative opposition party, Civic Platform, and behind even a dangerously populist agrarian party, Samoobrona (self-defence). With a general election looming next year, the possibility of another SLD victory now seems far-fetched. The bigger question is whether the party might suffer a defeat so crushing as to finish it as a serious force, or at least to bring drastic changes, including the departure of Mr Miller's generation of ex-communists from its leadership.

The scandals that have tainted the SLD's reputation drag on. This week the head of the party's parliamentary caucus resigned, two months after he was caught up in allegations of influence-peddling. Next week Mr Miller will give evidence in the trial of Lew Rywin, a film producer who allegedly offered to use his political connections to influence the drafting of a media law in ways that would favour a private publishing group, in exchange for a large payment. The court hearing is unlikely to produce new sensations, but it will do little for Mr Miller's image.

The good news is that Poland's economy is picking up. But that comes despite government policies, not because of them. This year's budget, which parliament was due to approve on January 23rd, promises another big deficit - perhaps 5-6% of GDP, after 4.8% last year. Unemployment remains high. Government borrowing will continue to crowd out the private investment that Poland needs to raise growth and catch up with its richer neighbours in the European Union, which it joins in May. Too much is being spent on badly targeted social-security schemes and on poor-quality public services.

EU entry has highlighted the need for fiscal reform, because it requires the Polish government to work towards the adoption of Europe's single currency, the euro. Under the Maastricht criteria, this means running a budget deficit no bigger than 3% of GDP. Mr Miller's economics minister, Jerzy Hausner, has produced a medium-term plan for belt-tightening that includes bold structural reforms, such as raising the retirement age for women to that for men, and the trimming of automatic indexation of some benefits. The programme is due to be adopted by the government on January 27th, but already it is in danger of being watered down, after opposition from trade unions and others.

The Hausner plan seems well-intentioned economically, but eccentric politically. Savings begin in earnest only next year, when a different government with ideas of its own is likely to be in office. At worst, the plan will be cut to pieces to appease spending constituencies. That could unsettle the financial markets, which have already punished Hungary for a slack fiscal policy by sending its currency, the forint, skidding and its interest rates soaring. The Polish zloty is already under pressure.

A different problem is how to repair relations with France and Germany, which Poland would dearly like to count as allies. Both have criticised Poland, along with Spain, for blocking the draft EU constitution at last month's summit. Poland objects mainly to a proposed new voting system for national governments that would reduce the generous weights promised to Poland and Spain under the Nice treaty of 2000. Mr Miller's tough stance over the constitution won him applause across the political spectrum at home, but he has overdone things by endorsing opposition cat-calls for “Nice or death”. His government does not want to enter the EU at odds with two of its leading countries, and stereotyped as a troublemaker.

Moreover, even while professing impatience with the Poles, the French may be smiling behind their hands. The more the EU is divided by constitutional and other rows, the stronger the French case for a tighter Franco-German alliance that could lead a pioneer group towards closer integration. That would leave newcomers such as Poland out in the cold once again.

Poland's hopes for a rapprochement rest mainly with the Germans, whose enthusiasm both for EU enlargement and for an EU constitution has been more sincere. The Poles hope quietly for a compromise deal that would postpone the decision on a new voting system for another four or five years. That means finding a formula that satisfies Germany and others by making the shift to a new voting system almost inevitable, but which Poland could paint as something less than a surrender. A tall order, even if Germany co-operates.

Whether the constitutional row rolls on or whether it is solved in a way that upsets Polish voters, the result is likely to be a bumpy ride into the EU for Poland in May. Small wonder that Mr Miller long since abandoned talk of calling an early election in June, to coincide with elections to the European Parliament and to profit from the boost that EU entry was once expected to give the Polish national mood.

But that still leaves him facing an election next year, with no prop to his popularity save for hopes of a modest rise in economic growth, from 3.5% last year to perhaps 4.5% this year. If the outcome is a defeat which shatters the SLD, few on the Polish right will consider it much of a loss. The worry is where its alienated voters will turn. If they go to the moderate right or left, well and good. But if they go to Samoobrona and its like, then Poland, and Europe, have some problems ahead.

Poland's Prime Minister is under pressure at home and abroad.