Thursday, July 17, 2003

Volume 11/12 Number 4/1 Winter 2002/Spring 2003

Constitutional Watch
A country-by-country update on constitutional politics in Eastern Europe and the ex-USSR

Poland - Poland’s heated negotiations with the European Union, continuing to the eleventh hour, were concluded only in the last moments of the Copenhagen summit. As was the case with most of the other applicant countries, the agriculture chapter of the acquis communautaire was the most contentious, threatening to push Poland back into the second round of enlargement. Domestically, as well, the issues stirred up much political debate and nearly toppled Prime Minister Leszek Miller’s government, which consists of the Democratic Left Alliance (DLA), the Labor Union (LU), and the Polish People’s Party (PPP).The last-minute controversial negotiations were completed against a backdrop of a major corruption scandal involving DLA and Prime Minister Leszek Miller, cabinet reshuffles, and a stagnating economy (the country is currently registering its highest level of unemployment ever, at nearly 19 percent). Poland’s negotiating team finally reached a compromise with Brussels. But the terms of accession are still an issue at home, and the ruling coalition does not seem to have recovered fully from the difficult negotiations.With the coalition only weakly holding together, the government embarked on its campaign for a “yes” vote in the referendum on EU membership, set for June 8. Many speculate that the government could fall apart after the popular ballot.

Poland has always been the most problematic of the ten countries recently admitted in the big bang of enlargement. The country, with a population of 39
million, is the largest of the new members and will be fifth among all member states. In addition, one quarter of the country makes its livelihood from agriculture, a
much higher figure than the European average of 5 to 7 percent.Moreover,many of these are small farms with low production levels. While the EU feared that
supporting Polish farmers would bankrupt its strained and disputed Common Agricultural Policy (CAP), Polish farmers feared they would not be able to
compete in the EU market.

In addition, the government’s hand in negotiating the agriculture chapter was constrained by PPP’s presence in the ruling coalition.The party, which holds the
agricultural portfolio and counts the rural sector as its constituency, pushed the government to strive for better deal for Poland’s farmers, on several occasions
threatening to quit the coalition if its terms were not met. PPP’s exit would bring about the government’s collapse and force Miller to either find a new partner or
head a minority government. Moreover, a noisy rightwing opposition party—Self-Defense—has led an aggressive campaign, accusing the government of
selling out Poland’s farmers, and is actively campaigning for a “no” vote in the referendum.

With all the other chapters negotiated, only agriculture remained; the most critical issue was the level of CAP subsidies to which Polish farmers would have
access. Also contentious were quotas on milk production and the VAT rate on certain items. Like the other aspiring member states, Poland balked at the EU
proposal that Polish farmers receive direct subsidies at a level equal to 25 percent of that received by farmers in EU member states, reaching full levels by 2013. As late as October, Poland was the most strident among the candidates, insisting that Polish farmers receive payments on par with EU farmers. In the face of an
unbudging EU, the government finally changed its negotiating position on October 16, requesting higher production quotas on items such as milk, sugar, and
beef and import tariffs to protect the Polish market from being flooded with EU goods. At the same time, the government gave up its demand for full subsidies
for farmers, though it still insisted on more than 25 percent and a shorter transition period to full levels. Poland also asked to base eligibility for aid on farm size,
rather than tying it to production levels, as is the case in the EU.The EU formula would keep many of Poland’s small, impoverished farmers from receiving aid.

In late November, just weeks before the summit, it seemed the impasse between the EU and the new states had been overcome when Denmark, which held
the EU presidency at that time, came up with a new proposal according to which subsidy levels for farmers would reach 40 percent of EU levels.The proposal did
not increase the bill for enlargement, since it would allow the new member states to use rural development funds to top off subsidies. In addition, membership was
pushed back from January 1 to May 1, meaning that membership dues paid by the new states, now obligated for only half of 2004,would be lower.According to EU rules, the countries would still have access to the full annual amounts of subsidies and other funds.With this change, the new members would be receiving more
than they were paying in, a major concern for the candidate countries.

Although the new proposal provoked some anger from other EU members, such as Germany, which claimed it had not been consulted on the matter, it did not fully appease Warsaw.While DLA seemed to accept the deal, Jaroslaw Kalinowski, who heads the Ministry of Agriculture and is both a deputy prime minister and PPP’s leader, termed it “unsatisfactory,” insisting on levels of 65 percent. Denmark responded, calling Poland “ungrateful.” At times during these last weeks of negotiating, the governing coalition seemed on the verge of collapse, with PPP threatening to withdraw. In an eight-hour cabinet meeting, on November 30, the Polish government ultimately accepted most of the Danish proposal, but continued to press for its own formula for subsidies, higher milk quotas, and a lower VAT rate on agricultural equipment. It seems that PPP was trying to play both sides of the fence, convincing farmers that it was not abandoning them, and thus keeping their supporters from switching allegiance to Self-Defense, while not sabotaging Poland’s accession to the EU.

In the days before the summit, it was still unclear if Poland would be able to reach a deal with the EU. Yet, in the final hour, an agreement was reached. The
EU agreed that Poland could top off its subsidy levels from rural development funds but stipulated that anything above 40 percent had to come from Poland’s
own budget. It also made a large chunk of money from structural funds available for direct injection into Poland’s national budget. This final adjustment seemed
to be the deal maker. Although it did not grant extra funds for enlargement, it allowed Poland direct access to money that normally would be tied up in the structural programs that entail bureaucratic procedures for access. According to the final deal, farmers will receive direct subsidies equal to 55 percent of EU farmers in 2004, 60 percent in 2006, 65 percent in 2008, reaching full levels by 2010.The EU also increased Poland’s milk quota by 1.5 million tons, bringing it to 8.5 million, and lowered the VAT rate on housing construction. Poland’s team left Copenhagen claiming a success. Although Kalinowski called accession a “historic chance for Polish agriculture,” in what was called an emotional statement, he also said the final agreement was not ideal but acceptable. He did not appear at the press conference announcing the completion of accession negotiations, leading some to fear PPP would weigh in with a “no” vote.

Although the acquis communautaire process has been completed, EU accession continues to stir up debate in Poland. PPP remains keen on appeasing farmers, who feel betrayed by the final accession bargain, while still not coming out directly against membership. Although parliament approved the government’s report on the accession by a vote of 272 to 124 with three abstentions, a controversy again arose over the farming subsidies once the negotiations had been completed. According to what was agreed in Copenhagen, all farmers are eligible to receive subsidies that begin at levels set at 25 percent of those received by EU farmers.Yet anything exceeding 25 percent will be tied to production levels. Kalinowski claimed he did not know about this detail and argued against the formula, stating that all farmers should be eligible for the full amount Poland had negotiated. Miller also stated that he did not realize the EU was proposing the mixed formula. In response, farmers staged protests across the country that, at times, turned violent. Although it originally claimed none of the terms were renegotiable, the EU agreed to a compromise according to which farmers who cultivate food items not subsidized by the EU (such as beets and potatoes) will have the level of subsidy tied to farm size and thus will only be eligible for 25 percent of subsidies. Farmers who produce items subsidized by the EU (such as grain,
milk, and meat) will have subsidy levels tied to production level and thus will have access to the higher levels.

Another controversy emerged surrounding Poland’s restrictive abortion law. First adopted in 1993, the law allows termination of pregnancy only in incidents
of rape and incest, when the woman’s health or life is threatened, or when the fetus is damaged. In Europe, the law is second only to Ireland’s in restrictiveness.
In 2000, only 134 legal abortions were performed in Poland. On December 19, Marek Dyduch, a DLA deputy and the government’s general secretary, stated that DLA was “not giving up our campaign promises regarding reproductive rights. After the referendum, we will begin to liberalize the antiabortion law, which we know will be unacceptable to the Catholic Church.” Indeed, during its most recent parliamentary campaign, DLA had promised to liberalize the law. However, it has backed off more recently, apparently fearing that changes in the law would bring the party into conflict with the Catholic Church, which might urge citizens to vote against accession. For many of a more conservative ilk, the EU is viewed as a liberal, secular institution.

Although immediately denied by Miller and President Aleksander Kwasniewski, Dyduch’s statement reignited the highly politicized abortion debate, and the church leadership requested that the government seek an annex to the EU-accession treaty that would stipulate Poland’s sovereignty on the abortion issue. Although the EU treaty does not address abortion or any such issues, antiabortion forces apparently worried that a European parliament resolution from last year, urging all member states to legalize abortion, could be used as the basis for liberalizing the law.The government gave in, and, in late January, sent a note to Brussels proposing an annex that read: “The government of the Republic of Poland understands that none of the provisions of the Treaty on European Union, or in the treaties establishing the European Communities, or in the Treaties or the Acts modifying or supplementing those Treaties, shall disturb the right of the Republic of Poland to regulate on issues of moral importance and concerning the protection of human life.” (In addition to abortion, the government wanted to safeguard Polish legislation criminalizing same sex marriages and euthanasia.)

The government stated that it did not seek the annex because EU membership might force Poland to change its legislation, but, rather, to prevent Euroskeptics from using the abortion issue to oppose membership. Malta also negotiated an annex, although before accession talks were completed, stating that present and future EU law cannot force the country to change its abortion legislation. Ireland has a similar provision. Poland, however, only approached the issue after the accession agreement was complete, which seemed to pose a problem since the EU was hesitant to make any changes to the 6,000-page treaty. Ultimately, though,Poland got its way, and the annex was included.

While the government was working to complete all remaining issues in the acquis communautaire, a major corruption scandal at home tainted the government and pushed its approval ratings down further. In late December, Poland’s largest independent newspaper, Gazeta Wyborcza, published reports of a secretly taped
conversation during which its editor, Adam Michnik, was solicited for a bribe.According to the paper, in July, Lew Rywin, chairman of the supervisory board of
Canal+ and owner of Heritage Films, which produced Schindler’s List and The Pianist, solicited a bribe of $17.5 million from Agora, Gazeta Wyborcza’s parent company, in return for changes in amendments to the media law under consideration by parliament at that time. Rywin did not name Miller directly but alleged to represent a party in power, presumably DLA.

The scandal was noteworthy not only for its connection to the government. Michnik is a significant personality in Poland, who spent years in jail during the
communist regime, and was an important figure in the anticommunist Solidarity movement. In 1989, he founded Gazeta Wyborcza, often regarded as the best
independent newspaper in Eastern Europe.The media law amendments in question had also been a continuing source of contention between the independent
media and the government. Of specific concern was an amendment that would prohibit newspapers from owning national broadcasters and would otherwise
restrict licenses for broadcasting.Agora has expressed an interest in buying Polsat, a commercial television station (owned by Canal+).The amendments would block the purchase. Rywin had promised to change the amendment to allow Agora to purchase Polsat, which also would have helped his ailing Canal+.

Some observers contend that the amendments, which were included in the legislation by the government, were a direct stab at Agora.When announced in
April 2002, the proposed changes to the media law met with criticism from media outlets and were characterized as an attempt to strengthen government-controlled television and radio.At the time, Miller argued that the step was necessary to address media concentration, but President Kwasniewski asserted that he would block the legislation. The independent media also claimed that the amendments would weaken Polish media vis-à-vis foreign outlets.

On December 30, parliamentary speaker Marek Borowski announced that the legislature would review the law in light of the controversy. The prosecutor’s
office launched a criminal investigation, and parliament set up a committee to inquire into the scandal. As the story grew,Michnik expressed regret at having
delayed reporting the alleged bribery attempt. He claimed that the paper wanted to conclude its own investigation before going public and also did not want to harm the government in the final EU negotiations. Both Michnik and Miller were questioned by the prosecutor’s office, which, on January 14, charged Rywin with soliciting a bribe, punishable by up to three years in prison.

Tuesday, July 01, 2003

The voice of general public and business people on corruption

What do the general public and the business people in Poland think of corruption?
Kubiak, A. / Stefan Batory Foundation, Warsaw , 2003
What do the general public and the business people in Poland think of corruption? This report describes the findings of a research on corruption conducted in June 2003.

The first part of the research is a public opinion survey, conducted on a random-address sample of 1016 adult Poles. Questions included in the survey referred to corruption-related experiences of survey interviewees. The second part of the research is an individual questionnaire, addressed to private company owners and managers to obtain information on the way corruption is perceived by business people.

Major findings of the research are:

every day personal contacts with healthcare, traffic police and various public administration units are tangible proof for about 20% of adult Poles that they live in a country with high levels of corruption
business people attach greater importance to corruption as a social issue than the total population of Poles do
the majority of business people (66%) are convinced that there is a growing proliferation of corruption in Poland, and almost 30% declare that corruption is becoming more and more of a problem in their business activity
together with delays in payments, business recession, taxation and credit problems, corruption is seen as a major barrier to running a business
based on their personal experience, two thirds of business people believe that there is a special additional tax burden in Poland – the so-called ‘bribe tax’
the items reported most frequently as corruption-prone are customs offices, tenders, public procurement, permits for company expansion and business launch, and getting contracts from other private companies
business people are extremely critical of the offices and employees of regional self-government administration with respect to their involvement in corruption
business people express strong disapproval for corruption and seek its sources in lack of moral standards, in human dishonesty and the wish to have more at any price
the level of strong disapproval for corruption on moral grounds is lower among business people (14%) than in the overall population
on the other hand, though, business people more frequently express lack of acceptance for corruptive practices (38%), side by side with lack of approval for their presence (44%)
In conclusion, business people believe that the best way to curtail corruptive behavior is to reduce the quantity of legal regulations and to make them as precise and explicit as possible.

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