Wednesday, July 18, 2012

PSL. Lol.

Not so lucky right now
Who here was surprised by the so-called "PSL tapes" showing the former head of a farm agency run by the Agriculture Ministry allege that Polish Peasants' Party (PSL) members were fleecing the public purse?...Bueller?

The PSL's entire ideology, nay, its raison d'etre, seems founded on sticking its people in public ministries, agencies and institutions -- usually farm-related -- where they can most benefit. And how they do benefit sometime.

Case in point is one Andrzej Smietanko, the ex-president and current director of Elewarr, a state company that controls the biggest grain elevators in Poland and run by the Agricultural Market Agency (ARR). Smietanko makes PLN 29,000 a month in a country where the average salary is about PLN 3,700. This is padded by a bonus of 3% of the agency's profit and he gets PLN 7,000 for sitting on the board of a company Elewarr owes. Trouble is, the government watchdog NIK found that he was hired without proper qualifications (I suppose other than being a PSL man).

Elewarr has in fact been hounded by NIK for some time. The watchdog even demanded Elewarr directors return PLN 1.4mn in bonuses paid out that were illegal. The money was ordered returned…though so far none of it has, surprise, surprise.

Agriculture Minister Marek Sawicki fell on his sword today as part of the effort to protect the PSL from negative fallout to the scandal. Prime Minister Donald Tusk, who is savvy enough to have demanded a fast response, might even take over the ministry temporarily.

Before the scandal goes, though, the European Commission's interest has been piqued. It demanded on Wednesday that the Polish government explain what was going on with the ARR. If reports that money was wasted are proven, it will call on the government to return funds.

The PSL has always been the weak link of the coalition. A scandal such as this was just a matter of time. For now, Tusk says the coalition has provided "more good" and so should continue, though he called on the PSL to purge itself of impropriety.

This reminds me of the fable about the scorpion and the frog, which can be altered to fit the recent events. The PO (frog) agrees to carry the PSL (scorpion) across the Vistula after extracting a coalition agreement the PSL won't sting the PSL. When half-way across the river, the PSL stings. When Tusk asks PSL leader Waldemar Pawlak why he stung the PO to kill off the coalition, Pawlak answers, "it's in our nature."

We'll see if the PSL can prove this wrong.

Thursday, July 12, 2012

We don't need no education

At the cost Polish teachers want to charge for their services we don't need any no education. Teachers in Poland spend the least time actually teaching in Europe. For the 2010-2011 school year, the average Polish teacher spent 14 hours a week in front the chalkboard. Ouch.

A German teacher spent nearly double that, teaching for 26 hours. But it's hardly surprising that a German would work longer than a Pole. Yet, a Spanish teacher spent 25 hours in front of the class, French and Finnish ones some 24 hours, and a Greek teacher taught for 21 hours. My god, Greek teachers worked harder than Polish ones. That's got to be a new low.

The Polish daily Rzeczpospolita notes that before 1982 teachers taught class for a more respectable 26 hours a week. In 1982, General Wojciech Jaruzelski, the then ruler of a Communist-controlled Poland still caught in the grip of Martial Law, bought off teachers that had been threatening to strike by agreeing to much shorter working hours and guaranteeing privileges.

The rules still in place don't require Polish teachers to be in school beyond actual lecture hours. Teachers counter probably (and somewhat justifiably) that they don't get paid a lot to sit around at school.

But teachers do get paid to go on holiday. Jaruzelski's largesse and the lack of reform since means Polish teachers get some 80 days of holidays a year. That is nearly three full calendar months of holidays.

Local governments attest that the high cost of teachers combined with low productivity is helping ruin their budgets, according to Rzeczpospolita. Local government reps say that as long as the central government doesn't want to splash out for teacher privileges, it should limit them. Their main demands are to increase working hours, lengthen promotion thresholds and cut holidays.

Teachers, unsurprisingly, are having none of this. Some 96% of them vowed to protest against any limitation of their current rights. A full 30% said they were willing to go on permanent strike.

The Education Ministry, for now, is ready to back down in the face of always unpopular protests with parents. It says no changes will be made to working conditions without teacher approval. We know exactly what that means: there will be no changes.

Change, however, never stops. With Poles ageing fast, there simply won't be enough kids to go around, even if teacher working hours are kept ridiculously short. In this context, it seems the quicker the system can move to paying fewer good teachers well the better. Otherwise, the question really be 'is our children learning?'

Wednesday, July 11, 2012

Market diseconomy

The ever creative Waldemar Pawlak has been the goat of this blog before. Now he's back. His latest idea is so infuriating I've even been riled from my non-blogging slumber. Deputy Prime Minister and Economy Minister Pawlak wants to mess with the market, but not in a good banks-are-back-stabbing-bastards kind of way but rather of the could-ruin-the-game-forever sort.

Poland's construction companies were once the envy of the lot when everyone pondered the likely impact of billions of euros of EU funds and billions of zloty of public money combined with the utter lack of road infrastructure. Surely the money would start rolling in.

But a combination of self-defeating public procurement laws that encourage companies to bid too low and likely a large dollop of hubris has led some of the biggest to the brink of doom.

Enter Pawlak. The good sir Pawlak says the companies should be saved from their own mistakes. At first, he suggested the troubled ones should be nationalised a la General Motors in the US. It's not their fault after all, he says. After realising the troubling implications of a state buying up private companies, he has changed tack.

Now Pawlak says that one beleaguered builder needs 'only' PLN 500bn and that the state can buy bonds issued by that company. The ever generous Pawlak even says the state could pay above-market prices. How nice.

To the rescue comes…Jacek Rostowski, finance minister. When asked whether the construction companies should be saved, the usually garrulous Rostowski says "no." When asked whether builders' bonds should be bought, the answer is "no."

It's troubling that Pawlak can't see that if Poland were to bail out every private company that got into trouble, it would eventually be back in the not-too-ancient past when the state did indeed call all the shots, to everyone's ill fortune.

I'm not a market purist, but it seems to me a little deterrent might go a long way, not just for Poland's builders but perhaps for the world's banks as well.