Sunday, July 16, 2006

New Polish government promises to pursue key reform - but not just now

WARSAW (AFP) - Poland's newly sworn-in conservative government back-pedalled on a promise to pursue key reforms to public finances, saying the reform drive was in such a state, it would have to be put back until next year.

"The state of preparation of reforms to public finances is such that there is some doubt as to whether they can be introduced this year. They will therefore be delayed until next year," Prime Minister Jaroslaw Kaczynski said after his government held its first meeting, right after being sworn in by the premier's twin, President Lech Kaczynski.

Under the previous government, led by Kazimierz Marcinkiewicz, Poland launched reforms aimed at restructuring public expenditures and bringing its deficit into line with the so-called Maastricht convergence criteria for joining the single currency eurozone -- even if the country has not set a date for adopting the euro.

Marcinkiewicz stunned Poland-watchers last week when he announced he was resigning. He was replaced at the start of this week by Jaroslaw Kaczynski, who almost immediately made reassuring statements about how his government would pursue the public finance reforms and take other steps to foster economic stability.

Some experts have said that Marcinkiewicz was shown the door by the Kaczynski brothers because he was becoming too independent for the twins' liking.

Marcinkiewicz personally chose Pawel Wojciechowski earlier this month to replace former finance minister Zyta Gilowska, who had launched the finance reforms but was fired in June amid a scandal over her alleged communist past.

She has said she was forced from office because the reforms she had set in motion "affected a lot of people".

Jaroslaw Kaczynski said Friday he would welcome Gilowska back into the government if she is cleared by an official probe of accusations that she lied about her ties with the communist secret police.

On Friday, the only changes to the new government were the appointment of Stanislaw Kluza to the finance ministry and the creation of a new cabinet post -- minister without portfolio in charge of coordinating the cabinet's activities.

The new post went to Jaroslaw Kaczynski's aide, Przemyslaw Gosiewski; Kluza became Poland's fourth finance minister in nine months.

Jaroslaw Kaczynski outlined his government's foreign policy, saying it would be more "national" in its outlook while focussing on "membership in the European Union and NATO, and our alliance with the United States," he said.

"We will, however, need to be bolder and more determined, because Poland's opportunities in the international arena have not been adequately exploited," he said.

The Marcinkiewicz government waged several ill-strategised battles against Poland's European partners, all with the aim of defending Poland's supposedly superior interests.

Poland vetoed an EU accord on reduced rates of value added tax for certain services before back-tracking two days later. For months, it blocked the merger of Italian banking group UniCredit's Polish units, but eventually gave in after stern warnings from the European Commission.

And it spoke out against large foreign-owned hypermarkets, even though they are some of the biggest investors and job-creators in Poland.

Jaroslaw Kaczynski's government will officially take up its functions after its programme has been approved by lawmakers next week.

Parliament is widely expected to approve the programme because the Kaczynski brothers' Law and Justice (PiS) party has been in a coalition since May with the far-right League of Polish Families and the populist Samoobrona parties, which has 239 votes in the 460-seat lower house.

Opposition parties warned Friday that the new government would probably do Poland more harm than good.

"The Jaroslaw Kaczynski government will not guarantee peace, dignity or a good international position for Poland," said Donald Tusk, leader of the business-friendly, liberal opposition Civic Platform (PO) party.

The head of the Democratic Left Alliance (SLD) parliamentary caucus Jerzy Szmajdzinski warned that the policies of the new government would be "Euro-sceptical, conservative and populist."
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