OFE – the epilogue

A meaningful event of the passing week (incidentally noticed by me with a two-day delay) was the ruling of the Constitutional Tribunal that cancellation of government bonds held by public pension funds run by private asset managers and subsequent choice between state-run pay-as-you-go and private-run pension systems were both no violation of law.

The ruling is anything but a bolt from the blue, if sound judgement and common sense are in use. Public character of assets accumulated by the pension fund has been reiterated many times (including Supreme Court ruling in 2008), moreover a simple logic leads to you the conclusion that by no means Poles’ “savings” in individual accounts allocated to their names have never belonged to them.

Experts point at potential consequences of the verdict. Firstly, it given green light to reckless politicians to reach out for the assets remaining in pension funds to finance their otherwise undeliverable promises. When government bonds were cancelled, I did support the move of PO government which finally eliminated hollow circulation of money, but this time other assets are at stake. Pension funds hold now nearly only shares of Polish public companies, in many of them are an important shareholder. Grabbing those assets and attempting to dispose of them, or just taking them over by the government could have disastrous effects (especially in terms of corporate governance). Regardless of my scepticism towards OFE, I am wary of silly attempt to scrap the remnants of the system. And if it is to be wound down, it needs to be carried through slowly and with care.

I doubt PiS will aim at full liquidation of private-run pension funds, as Mr Orban did in Hungary, but pursuit of the party’s economic agenda remains in the realm of the unknown. Shortly after the ruling Nowoczesna.pl declared it would submit a draft of a decree stating assets in pension funds are private property of pension fund participants. Such new law, in order to make any sense, would need to empower citizens whose pension contributions were paid into pension funds, to have discretion over their assets. Sell-off on the Warsaw Stock Exchange would be in the cards then, I suppose. I voted for Nowoczesna.pl, yet it does not mean their agenda is fully in line with my views. Defence of OFE by Mr Petru and his henchmen is not what I would have ever put up with.

Two weeks since the memorable have gone by and speculations over the line-up of the would-be PiS government are to be cut off tomorrow, when names of particular ministers are to be unveiled. Just like some prominent politicians of PiS were locked away during the campaign, after the voting day Mrs Szydło has enjoyed the well deserved rest. She confirmed in social media she was doing well, but did not seem to be involved in designating new government members. The more nasty commentators imply it is the Mr Kaczynski who is actually dealing out cards.

The inaugural session of the new parliament is scheduled for 12 November. By coincidence, an informal EU summit on migration problems is held on the same day. The collision between the two days is now a matter of squabbling between PiS and PO and bears a very poor testimony of Mr Duda’s stance towards importance of foreign policy. The topic of the summit is too significant to shrug it off and let Poland lack its representation. I confess not to know who (president or prime minister or any of the two) has the right to represent Poland, but in my view, if allowed by law and diplomatic protocol, the one who has stronger mandate (not the outgoing prime minister) should show up there and the inaugural session should have been planned for earlier or later date.

Could have done with a longer commentary, but spent most of this weekend catching up with overdue work. There have been some staff redeployments within the New Factory and my scope of duties has increased well beyond what can be handled within 40 – 45 hours a week. Hope things shape up within a few weeks.