Showing posts with label European Union. Show all posts
Showing posts with label European Union. Show all posts

Sunday, 12 June 2022

A farewell to combustion engines

It happened. On Wednesday the European Parliament passed a resolution as a result of which brand-new cars with combustion engines would not be registered in the European Union since 2035. Traditional blachosmrody will give way to electric or hydrogen-fuelled engines.

The quest for limiting carbon dioxide emission, cleaner air and environment protection is inevitable and commendable, but is switching to electric cars the right direction? Does the future of motoring many have relished on, make sense?

The basic idea behind going electric is the lack of CO2 emission at a vehicle’s exhaust pipe. But have the proponents considered the total lifetime carbon footprint of electric cars and their traditional predecessors, given:
a) bigger environmental impact of battery manufacturing,
b) even worse impact of battery recycling,
c) imperfectly short usable lives (both in terms of years and mileage) of batteries?

The automotive industry will be forced to make a technological stride until 2035 which will:
- decrease costs of producing electric vehicles,
- increase their ranges and
- shorten charging times,
but 13 years appears to be a little time.

If we are to make use of electric cars conveniently, the coming decade is to be spent on building charging infrastructure, including adjusting installations in buildings with car garages. Unless kWh consumption per kilometre is decreased by that time, energy generation capacity and electricity grids would require significant upgrades. Countries which have invested in renewable energy generation will become beneficiaries of “going electric”, while those lagging behind, like Poland, might sadly end up… burning fossil fuels to produce electricity, under which scenario the carbon footprint would… increase.

In assessing whether electric car is environment-friendly, you must find out where the electricity for it comes from. If from a coal-burnt power plant, think twice

I hope by 2035 fast charging which would not shorten battery life would become prevalent so that car users no longer complain about charging times which last hours, which is particularly inconvenient during long-distance journeys.

Laws of physics are hard to be circumvented. You ought to remember an electric car is around 300 kilograms heavier (batteries are much heavier than a traditional engine, whose weight is not small anyway), which means more energy is necessary to set it in motion.

Looking at the above, you should sense my scepticism towards electric vehicles. If so, you are right, but I consistently claim engineers ought to focus on hydrogen and politicians should have the courage to tell people they will need to abandon their unhealthy driving habits.

Given the peril of the climate catastrophe, car ownership should become a luxury and a vehicle should be considered as a liability, rather than an asset. Its usage habits ought to be changed. Firstly – short-distance journeys around town, where a car can be easily substituted by going on foot, cycling or public transport should be eradicated. Secondly, car ownership should be taxed, while the tax rates should depend on a car’s weight (yes, the bigger your car, the more you should pay) its fuel efficiency or life-cycle carbon footprint (don’t turn a blind eye on environmental impact of battery production and predominantly recycling) and household status – second and next cars in the same household should be up to higher tax rates.

Our approach to motoring will require a change in mentality which is slowly under way, with many younger people no longer treating a vehicle as a status symbol, with many deeming it to be a costly burden. The change will, however, not take place overnight and many will remain unconvinced.

I fear the recent radical move of the EU will become a water to the mill of far-right anti-EU parties which will gain some support from defiant car-ridden individuals. I realise the climate change clock is ticking, but if we also know each revolution eats its own children, would it not be wise to consider a green evolution, rather a green revolution? An evolution would consist in a march towards a zero-emission world, probably too slow given the rising temperatures. But a painful revolution, accompanied by social anger could involve taking steps back to combat the unrest and reaching the ultimate goal not as quickly as planned.

Sunday, 16 August 2020

Belarus, where are you heading?

A short note today, as since yesterday I have been struggling a mini-heat stroke which hit me after cycling 70 kilometres with a 5-kilogram rucksack on my back in +28C heat on Friday. I was intent to swim in a lake, but the trip could have been done with some more convenient means of transport.

It goes without saying that the presidential election held in Belarus last Sunday has been rigged.

Needless to say, the opposition’s candidate has been blackmailed and forced to flee the country and seek asylum in bordering Lithuania (interestingly that it was not Poland that has given shelter to Mrs Tsikhanouskaya (mind spelling difference between Polish and English)).

Sadly, does not take aback the European Union has proven its weakness again. Gone are the times of Ukrainian orange revolution in November 2004 or Maidan protests in the same country in February 2014 when Western leaders acted up to the mark in aiding Ukraine break away from the dictatorship (for the latter attempt Ukraine has paid a price of the Russian invasion).

Democrats are facing a difficult question whether to interfere into internal affairs of a sovereign country and bring in democracy (attempts to install it in Middle-East Arab societies have turned out to plunge those countries into chaos, despite setting them free from dictators) or to let things drift and wait until suppressed nations stand up. For me the situation is akin to a dilemma of someone who hears that next door a neighbour beats up his wife. I believe domestic violence is not just a fellow men’s business and a decent man has an obligation to intervene.

Lukashenko regime remains powerful as long as it has police and army officers on its side. A few days ago armed forces appeared to stalwartly defend the status quo and hopes for winning the battle began to fade. Towards the end of the week one could hear of more and more instances of desertion and joining the protesters by OMON functionaries and soldiers. I believe if we are to pin hopes in anybody, those are the armed forces without which the dictator is powerless.

On moments like this I hark back to December 1989 when Romania’s communist dictator, Ceausescu was sentenced to death. I generally am against the bloodshed and capital punishment, yet somebody guilty of quelling a country’s potential and subduing a civic society deserves a war-time rather than peace-time condemnation. Such ending should remind a dictator how they may end up. On the other hand, fear of being killed would prompt them to take the cruellest measures to shield their regime.

Keeping my fingers crossed for Poland’s eastern neighbours. I realise the change will not happen overnight, this will quite likely be a long process of devolving power, yet I hope the change moves Belarus forward.

Sunday, 12 March 2017

PiS in power, episode 1 in 2017

Not a dreamt-up start into the new year for the current government. Nevertheless, the five image-tainting slip-ups have not sent support in polls sliding. I believe this will happen slowly, gradually, as more voters reach their pain threshold (i.e. as wrongdoings accumulate).

Moving about safely is not the biggest virtue of PiS. Over twelve months limousines carrying prominent politicians had three serious accidents. In March 2016 president Duda’s BMW fell off the motorway after a tyre popped. On 25 January 2017 minister Macierewicz’s motorcade moving at excessive speed on an icy road smashed into cars waiting ahead of traffic lights. On 10 February 2017 reinforced Audi driving prime minister Szydlo home collided into a tree after hitting an overtaken Seciento. Circumstances of the latter accident remain most blurred, however most recent findings reveal internal safety procedures have been breached and the vehicle was not moving at the allowed speed between 50 and 60 kmph as police and ministry officials claimed. Truth be told disrespect for safety rules and fondness of speed have been a domain of all predecessors of PiS, however nobody has learnt the lesson so far, especially as Internet users publish films from dashboard cameras, shot after 10 February 2017, showing dangerous motorcades of government limousines.

Defence ministry spokesman, Bartłomiej Misiewicz, the embodiment of personnel reshuffle conducted by PiS in government-controlled enterprises has been locked up around a month ago (having days off to compensate him for working overtime). After several incidences of high-rank army officials saluting to the (civilian) spokesman and after his foray to a night-club in Białystok, Mr Misiewicz is no longer in the limelight. His future remains uncertain, however minister Macierewicz will rather not leave him out in the cold, despite Mr Kaczynski’s clear statement that Mr Misiewicz is a predicament for PiS. Conspiracy theorists wonder what Mr Misiewicz knows about Mr Macierewicz and what Mr Macierewicz knows about Mr Kaczynski that guarantees Mr Misiewicz irremovability.

The proposal to enlarge Warsaw by adjoining over 30 surrounding towns has struck out of the blue. The draft law, not consulted with anyone, including around two million residents of Warsaw and nearby towns affected by the law, brought in a strong backlash. Experts pointed at several shortcomings of the document, including violating constitutional rules (who cares?). Besides, local governors in unison underlined the deputy Sasin’s draft had not been discussed with interested parties. PiS had to give in and back down from the plan of extending Warsaw’s borders before local government elections. I suppose as too many potential voters have stamped down PiS intentions and thwarted boosting chances of their candidate in winning mayor of Warsaw stool, politicians of the party will have a hard nut to crack.

Lex Szyszko, or the amended environment protection law is probably the most visible outcome of PiS in power. You just walk outside and see chopped down trees, on private and public lands. And as a matter of principle, the wood is hardly ever cleared away, so sights like this are commonplace (in the background, uncanny freight train on Siekierki coal line). I am in two minds about this law, remembering that cutting down wizened trees that do not come into leafs and pose threat during gusty winds is necessary for the sake of safety of humans and their property. It will take decades to make up for the harm inflicted over a few weeks of the law in force. PiS has taken note of its mistake and announced next changes to the law, time will tell whether they block unfettered tree-chopping spree, but whatever steps they take, they will not reverse the time and those who have benefited from the amendments over the recent weeks will not be deprived of their benefits.

The debacle of Poland’s candidate, Jacek Saryusz-Wolski is Thursday’s (not deferred) vote on the position of European Commission candidate is the biggest defeat of PiS government in international politics and in my humble opinion, the most prestigious calamity of PiS since they took over power. All remaining 27 EU representatives, including our closest allies, i.e. prime minister Theresa May and prime minister Victor Orban, without hesitation backed the incumbent president Donald Tusk. Competencies of Mr Tusk and common sense of 27 EU leaders have been superior to domestic conflicts. The United Europe showed thumbs down to Poland whose voice has become finally audible in Europe. Indeed, our voice is heard, but no one wants to listed to it. Poland’s foreign policy is finally not pursued on its knees. Poland’s diplomats and leaders have gotten up of their knees to fall flat on their faces, straight into a cold, dirty, muddy puddle.

I feel no joy writing the above. The events in Brussels demonstrate Poland is becoming a quirky outsider in the EU, whose officials will sooner or later lose their patience and take revenge, namely cut Poland off generous flow of money from the EU. Sadly, the defeat will change nothing in perception of PiS government inside the country. Those who oppose it will not change their mind, while approximately 20% of the electorate who are hard-line believers of Mr Kaczynski will genuinely put faith in all of his words and accept as true Mrs Szydlo’s trip to Brussels was a huge victory and that evil EU is to blame. I hope Poland does not take umbrage with the EU, as if this happened and EU retaliated, Poland, not the EU would be worse off.

Sunday, 3 July 2016

Belated reflections on Brexit…

…because writing on one adventure needed to take precedence, as thanks to committing my thoughts to the blog, I have gotten the story off my mind, at least temporarily… From time to time I wonder whether mere writing, without hitting the “publish” button would not suffice…


Some musings on the same topic, published on the same day, here on W-wa Jeziorki.

Those familiar with the theory of economics, surely know the concept of certainty equivalent. To put it simply, individuals prefer to be certain to receive a small amount / quantity of a good rather than take a risk to get a chance to receive larger amount / quantity of the good. This notion hinges upon preference of humans to eliminate uncertainty in life and hold on to what one can be sure of. In economic and social behaviours of individuals the theorem appears to hold true, but behaviours of masses (less often in terms of economics) more and more often call it into question. Notwithstanding, I am not wiping my eyes in astonishment. Back when I was a student, I was told by lecturers interest rates could not drop below zero. How short it takes to prove wrong notions that had lasted for decades…

There is no absolutely perfect thing in life. You cannot expect to have a perfect spouse, friends, children. There is no perfect job, no perfect house, no perfect holidays, no perfect vehicle. If you thought long enough you would find something to enhance in everything that surrounds you. Imperfection is an indispensable part of our lives, hence we ought to accept it and live with to the extent it is tolerable or strive to change it where it goes beyond acceptability. Having written this, I do not condemn striving for perfection, which in essence is praiseworthy, as long as pursuit of perfection does not make you lose your mind.

The Brexit referendum, or rather its result, is a spot-on example of rejecting an imperfect, yet decent and predictable solution. Membership in the EU has not been devoid of drawbacks, yet once you throw the baby out with the bathwater, you ought to have a clear and feasible idea how to fill the bath again.

This brings back a memory of a referendum held in Warsaw in October 2013 whether to oust the then-mayor, Hanna Gronkiewicz-Waltz. The campaign of Mrs Gronkiewicz’s opponents focused on her presidency’s shortcomings, but did not go beyond kicking her out of office, i.e. shed no light on any plan how to improve the state of affairs in Warsaw once she is deposed. Inhabitants of Warsaw discerned this lack of constrictive alternative and voted their feet by not going to polling stations. Consequently, the referendum was deemed invalid due to turnout below validity threshold.

The Brexit referendum is astonishingly similar to Polish parliamentary and presidential elections in 2015 in Poland. Platforma Obywatelska and president Komorowski in early 2015 were akin to the EU: they offered stability and predictability, yet were self-focused, complacent and out of touch. Yet Poles and Brits have turned their back on stability and predictability and opted for a change. But watch out, in all three votes the winning side had a tiny majority. 51.89% of Brits voted to leave. 51.55% of Poles voted for Mr Duda in the run-off, PiS scored 51.09% of seats in the parliament. Mathematically such results tip the scales, yet just like a glass can be half-full or half-empty, they mean nearly half of voters who exercised their right are displeased… 

Similar tendencies are witness across the world. In Austria in the recent election, though the result has been overturned, an extreme-right candidate scored around half of votes. On the horizon looms an imminent threat of Donald Trump becoming the president of the United States, which given the country’s democratic tradition and civic awareness of its residents, is horrifying and gives lie to all fairy tales of what features a candidate for this office should exhibit.

What manifests itself on macro scale can be witnessed on the level of individuals. I have seen several people being so weary or dissatisfied with their jobs that they grabbed any opportunity to move over to a different company. Usually with hindsight they regretted their decisions and humbly admitted their previous workplaces were not that bad, but their inner desire to change was stronger than sound judgement… On the other hand, despite allegedly record-high number of divorces and informal relationship break-ups, among my friends, acquaintances and workmates aged 25 – 50, I do not see many people quitting their partners because of a crush / infatuation / fascination with someone else, or just seeking a fleeting romance to taste a change (I may have bad insight, since the latter is not something one should boast about and what is rather kept in secrecy).

A cool head tells me each decision akin to remain-or-leave question faced by Brits in June 2016, should be preceded by a substantiated cost and benefit analysis. Whatever is in question, I can bet neither of two solutions under consideration is perfect, yet if you dissect them, spot advantages and drawback of both and sensibly decide which prevail, you are more likely to make a reasonable decision, instead of letting yourself get carried away by emotions (a fodder for wicked populists) or herding instinct.

Unless ruling elites finally stop being busy looking after themselves and realise what causes masses to throw away stable and predictable schemea and dive into the unknown at any price, humanity will be on slippery slope. 

Besides, I would not simplify the matter and point at immigration (whose meaningful contribution is beyond all doubt) as main driver of voting in favour of Brexit. Europeans living in the golden age (which might be now drawing a close) for decades have not experienced war, deprivation and thanks to quite evenly distributed fruits of long-lasting high economic growth have had their needs and whims met. They have grown bored of peace and abundance and instead of appreciating what they have, keep seeking some new impulses, an undefined change, without taking heed whether it would bring more harm than good.

W dupach się poprzewracało, tyle w temacie :(

Sunday, 7 February 2016

The quest for a better tomorrow

The day when the new police law comes into force coincides with the monthly overview of Poland’s new rulers’ attainments. As a relatively unpopular foreign-language blogger, I consider my place at the list of enemies of the good change is near the bottom, so I feel free to share my thoughts.

On 19 January the Polish prime minister participated in a debate on threats for democracy in Poland. The course of the debate and its repercussions were a debacle of liberals and a huge victory for Mrs Szydło (whose hollow words and declarations made much better impression than worthless utterances of leftist and liberal deputies) and for all EU-sceptical politicians who put in superb stunt as allies of PiS. The timing of the debate coincided with the news of several refugee rapes in Germany being concealed from the public, a water to the mill of those claiming Germany has no right to interfere into functioning of democracy in Poland if in the name of political correctness they covered up crimes committed by jobless rabble…

On Monday the banking tax came into effect. The draft of the retail trade tax is now in the phase of public consultation and nearly everyone involved tears a strip off it. In the shape it is put forward the biggest retailers who were supposed to bear the burden of the tax are likely to be beneficiaries of it. The most dreadful part of the tax which might be a nail to the coffin of small retailers and which might send several people unemployed is the highertax rate for turnover generated on Saturdays, Sundays and on bank holidays. This will also mean end of cheaper petrol over weekends (it is less costly because many company cars can be fuelled up only during the working week), bigger discrepancies between prices working-week and weekend prices (typical practice for repricing food produces in Auchan) and generally lower competition, since some retailers will drop off. Customer beware, you will pay the bill anyway!

By the way, formally each draft law undergoes public consultation under the lawmaking process. Sound commendably, but I wonder when any amendment proposed by the opposition or any other entity participating in the consultation is included into any final legal act.

The PLN 500 child allowance draft law is also being consulted. There was a short discord between the ministry of finance and the government, but Mr Szałamacha was swiftly taken to the task. Funding for the generous giving away is secured for 2016, when the programme will be serviced only over nine months and when one-off proceeds of PLN 9 billion from LTE frequency auction are to flow in, but streams of revenues which will finance the allowance from 2017 onwards have not been defined. Besides, politicians of PiS keep on appealing to the wealthiest Poles not to apply for the allowance, instead of setting an income cap above which parents would not be entitled to the benefit.

Besides, worth mentioning pace of works on the draft bears testimony to the greatest lie of the pre-election campaign. On 20 October 2015, as the TV debate between Mrs Kopacz and Mrs Szydło was drawing to a close, Mrs Szydło showed a blue file with ready drafts of new laws. She also told she would show the documents during a conference right after the debate. Needless to say subsequently Mrs Szydło only waved the file and has never showed any draft law. An excellent PR stunt, I wonder only why everyone, including journalists and politicians from today’s opposition, has fallen for it no one has taken the trouble to check out what the content of the file was?


And just recently PO came up with a counter-proposal of an even more generous pro-family agenda of giving out PLN 500 for every child, regardless of income per person in a household. Jaw drops open. If the biggest, in terms of number of deputies, party in the opposition, keeps on fooling about like this, in a year they will enjoy support below 10% in the polls. In the meantime Nowoczesna.pl is losing its vigour. In the long run Mr Petru and his partisans are unlikely to retain support above 20% and if they miraculously manage to win the election, they will lose power quickly. Affluent and resourceful people who want lean and efficient state, in other words liberal electorate, make up a tiny, though growing, percentage of voters.

After Standard and Poor's downgraded Poland’s rating, Fitch and Moody’s have announced reviews of Poland’s rating within 12 months and warned of possible downgrades for reasons far more substantive than those behind S&P’s move. As two other rating agencies point out, generous government spending calls into question fiscal balance and in the long-run is likely to decrease creditworthiness of Poland.

The government is getting to grips with the ailments of state-owned coal mines. During the campaign PiS promised not to close any mine and not to make redundant any miner. After the reality check strongly unionised miners, in order to help the government meet its promises, will have to accept salary cuts. Good luck!

Finally the Smolensk crash stands a chance to be scrutinised properly! The new team of experts, some of which even have notion about intricacies of aviation, but none of them has experience in investigating civil nor military passenger airplane crashes, is to carry out an unbiased investigation and definitely will not set any hypothesis in advance; exactly like Mr Macierewicz who signed a decree setting up the team and subsequently during the conference on which establishing the team was announced, adjudicated there had been an explosion which blew up the Tu-154 plane some fifteen or eighteen metres above ground level.

Three weeks into public media takeover, apart from a few spectacular lay-offs, the change I witness is less spectacular than many expected. The extent to which TVP is PiS biased is similar to how TVN is anti-PiS biased. Different views are presented and guests with different views are invited, but the bottom line message delicately instructs audience how to shape their opinion. Nevertheless, fortunately TVP has not stooped to the level of TV Republika, lousy propaganda which would drastically decrease popularity of TVP.

Sunday, 20 September 2015

Hospitality put to the test

Abortion, in-vitro, gay marriages, separation of the state and the Church… The list of discords between Poles has grown long for a while and this month attitude towards migrants joint the catalogue of divide lines. Actually the problem has not come out of the blue, but the influx of migrants and / or refugees to Hungary has triggered disputes how United Europe should face the challenge and how Poland should behave in order to protect its interests with encroaching European solidarity.

I used the terms ‘migrants’ and ‘refugees’ as they both show up in the discussions, yet should not be mistaken for each other, nor used interchangeably. In simple words, the former term generally refers to people who strive to settle down in another country to seek a better life, while the latter term describes people who had to flee their homeland because they had been persecuted there or because their country is war-stricken.

The scale of discord was best observable on… facebook. As I learnt, among my (so-called) friends I have both avid supporters of openness towards migrants, calling for greeting them with open arms and playing host to as many of them as possible, as well as extreme-right-wing freaks, posting one post after another decrying the migrants, displaying them as Muslim rabble (or would-be terrorists) assaulting Europe and attempting to set up their own rules here. The gap between the embracement and rejection for migrants was so wide that while I looked at posts from the two sides of the dispute, I wondered where the truth lies.

If I had followed only my leftist ‘friends’ and turned off news feed from my right-wing ‘friends’, I would have shaped an opinion of migrants as of poor people who had to choice but to leave their property and lives they had led behind and escape their homelands to search for a safer home. The newcomers would enhance cultural diversity of Poland and after all out of purely humanitarian reasons, we should take them in.

Had I tweaked with the visibility settings and left in only news feed from my right-wing ‘friends’, I would have viewed migrants as uncivilised horde, made up mostly of men aged 20-35, invading Europe in uncontrolled way, living in camps resembling rubbish dumps, rioting with the police, slinging stones into trains, robbing food from trucks, wheedling out social benefits, etc.

So where does the truth lie? In between? With time both groups of ‘friends’ cooled off, while other, more balanced posts began to emerge. As it turned out, the picture cannot be painted with one of two colours, it is neither black, nor white. There is a variety of shades of grey and the problem of inflow of thousands of migrants has many facets and it is not as simple as advocate or straightforward embracing or rejecting migrants claim.

Among migrants there are refugees from war-afflicted regions, but many more migrants take the opportunity to search for easier life in Europe, whose leaders naively want to play host to everyone. As statistics of humanitarian organisations and TV footages reveal, most migrants are young men, who on one hand are potential conscripts, on the other hand who have been probably sent by their families for a mission to settle down and then help other family members move in.

I argue motives of majority of migrants are purely economic. They do not want to just live in a peaceful country. Had they wanted, they would have stopped in Hungary, Croatia, or Poland, but they treat CEE countries only as a transit areas on their way to Germany, Austria or Sweden, where they would live off generous social security benefits. Quotas on migrants allocation EU leaders intend to set are an absolutely flawed way to tackling the crisis, since they totally disregard reasons which bring migrants to Europe. Even if Mrs Merkel instructs Poland, by threatening to cut off the stream of subsidies, to take in 10,000 or more migrants, unless tighter border controls are instated, those migrants will eventually land in Germany, because they do not want to live in a poor country which can offer them fairly low allowances. The way European politicians handle the matter prompts comparisons to centrally planned economy or to allocating animals between zoo gardens, while all decisions are claimed to be made in the name of most humanitarian, lofty values.

While reading the above you might have the impression I might be intolerant to migrants. The impression might be misleading. I am not afraid of migrants, I appreciate cultural diversity, I respect different customs and religions, skin colour, etc. In my neighbourhood I run across several people from Belarus or Ukraine who came here in search for better life, often work in grey economy to earn money, rent the cheapest accommodation, eke out a living and the rest of the money transfer to their families abroad. In the corporate world I have worked with people from former USSR and even from Middle-East regions and they have all been competent and reliable workers. Sometimes I eat out in restaurants run by guys from Turkey or one of surrounding countries and although I am most fond of Polish cuisine, I hold dear their contribution to variety of eateries in Warsaw. Those people have one thing in common – they work, while by all accounts most migrants flooding Europe have no intention to take up any job, but aim to settle down in countries with most generous social security systems. This is who I am intolerant to – loafers, regardless of their descent.

Once I discarded political correctness, time to face another truth – attempts to bring in Western-style democracies to Arabic countries have been doomed to fail. People living there are from a different cultural circle and simply have not grown up to democracy. With time I more and more often think it would have been wiser not to bring down dictators who, surprisingly, better kept law and order, than setting up democratic systems which are rather a travesty of democracy and in terms of death toll prove inferior to dictatorship.

I wonder how the whole story unfolds. I wonder whether tightening border controls would put to an end Europe without borders established by Schengen agreement.

I wonder whether putting in walls on some of the borders will divert the stream of migrants to Poland and if it happens, how the Poland’s administration will cope with thousands of migrants heading for Western Europe, especially if Germany closes its borders.

I wonder whether Poles would see train stations occupied by migrants, or if A2 and A4 motorways will have one westward lane occupied by marching migrants.

I wonder whether the commotion will reduce the number of safe tourist destinations available for Poles.

I wonder whether travelling by car across Europe will be a safe as and easy as it used to be…

And I hope by spring next year it all straightens out…

For those seeking a fairly unbiased coverage, I wholeheartedly recommend The Economist’s column dedicated to migration crisis.

Sunday, 5 July 2015

Greece on decline

Today citizens of Greece are about to decide in a referendum whether to agree on conditions of yet another bail-out package and fend off looming full-blown bankruptcy or reject austerity measures that on one hand keep Greeks on their knees, but on the other prevent the country from falling off the edge of chaos. In the previous sentence I have mentioned a full-blown bankruptcy, by which I mean the government would be unable of meeting its basic obligations towards the citizens. If effecting payments of pension benefits and other allowances ceases and the whole public sector would grinds to a halt, Greece will plunge into total chaos. In fact, since a few days Greece is formally insolvent, but in economic terms it has been bankrupt for more than five years, though much work has been put in to cover it up.

Looking back in time, the Greek crisis has been in overdrive since April 2010. To make a good comparison, recall how much time has elapsed since the Smolensk plane crash. For such long period of time Greece functions only thanks to drip of money from creditors.

Two questions which ought to naturally come to mind are:
1) why has the ordeal lasted for half a decade and no one bothered to put Greece out of misery, while creditors of Greece patiently pump in more and more money to the effectively bankrupt country?
2) why over five years, despite generous aid from creditors, Greece has not managed to turn itself around?

You could mention political backdrop of the whole situation, willingness of key actors of the European politics to keep the eurozone together, since letting one country go would give others a free rein to walk away from the common currency. You could mention other reasons, such as fear of knock-on effect, etc., yet the story which deserves to be brought to your attention is about how the Greek debt changed hands. In 2010 and 2011 key creditors of Greece were German and French banks, through which Greek sovereign default would spill over onto the whole financial system of the EU. In the spring of 2012 Greece's bondholders agreed to lose 53.5% of face value of what they had lent to the Greek government (look at this, had Poland been written down 53.5% of its sovereign debt, its debt-to-GDP ratio would have stood well below 30% and Poland would have been one of the least indebted countries in the world). Thus most of the Greece’s debt was relieved and in the meantime transferred from the banking sector to the EBC and to the IMF. Private banks thus had to swallow some losses, yet recovered nearly 50% of what they had recklessly invested in Greek gilts and got rid of the junky securities.

Over five years of keeping head above water only thanks to continuously rolled over lending from international institutions, Greece has not gone ahead with structural reforms that would eradicate all the roots of their misery. Instead, it whiled away. It also has to be underlined austerity measures slowed economic growth in Greece and impaired the country’s ability to service debt. The cure has nearly killed the patient and made (lazy and economically illiterate) Greeks fed up with the fact their lenders have been dictating them what to do. The disgruntlement brought populists to power and after a few months of their rule, stance of Greece in negotiations with creditors has somewhat hardened.

The result of today’s referendum is anything but predictable. Greeks are strongly divided regarding the government’s refusal to further accept conditions set by lenders. The more rational part of society fears a scenario of banking sector’s collapse, which would mean loss of savings for those who have it and downfall of public finance system, which would mean public sector employees would not get their salaries and pensioners would not receive their benefits. I have no idea, what the other half think they will achieve by showing the middle finger to creditors and whether they realise how dire the consequences of being cut off from IMF’s and EBC’s money are.

Even assuming Greece is ousted from the Eurozone and all its debts are written off, the problems will not disappear. Greece would not be perceived credible by anyone (maybe except for Russia, which could lend to Greece to extend its sphere of influences), so no one would lend them (a liar) money. Greece would have make ends meet on its own, something the country accustomed to living beyond its means is not capable of. The situation is hence tragic enough that even pressing ‘reset’ button and letting Greece begin from scratch would not help.

Nevertheless, cognisant of consequences of Greece going insolvent, I do not commend of extending the misery of the country. Moreover, I believe far too much money has been injected into Greece, money that will never be recovered, therefore checking out and putting Greece out of misery in a controlled way would be the most reasonable solution.

What is going to happen tomorrow when results of the referendum unfold? If majority of voters back continuation of austerity program, the populist government will lose credibility and should step down. If majority of voters support showing the middle fingers to creditors, we will be watching history in the making.

Any lessons to learn?

Firstly – a common currency does not prove to be a good idea if area where it functions is insufficiently economically uniform (do not confuse with integrated). The benefits of one currency do not make up for lack of flexibility offered by having a domestic currency.

Secondly – letting populists grow into power does not seem to be the way to heal the ailing country…

Sunday, 21 September 2014

Government reshuffle

The expected course of events after former prime minister’s Tusk appointment to the office of the President of the European Council was his resignation from the position he had held for almost 2,500 days (the longest tenure in the history of Poland after 1989). A quite natural and in my humble opinion, most suitable candidate for his successor was Elzbieta Bienkowska, until recently deputy prime minister, in charge of ministry of infrastructure and development. Fortunately and unfortunately for Poland, Mrs Bienkowska will continue her career within EU structures as European Commissioner what precludes her from taking over as prime minister, a function she would definitely be eligible for (she’s got balls!).

Instead, Ewa Kopacz, former minister of health and speaker of parliament hitherto, was nominated as the new prime minister and entrusted the mission to form a new government. As my former boss told me, each new leader in an organisation, to justify they are the right person in the right place, needs to turn something upside down within the first months since taking up the new job. In the corporate world one needs a few months to get familiar with how an organisation functions before one initiates bringing about a change. In politics, before setting out to do the job, a new leader must elect members of its team. The mere change of a prime minister was hence out of question and Mrs Kopacz, to reinforce her position and independence in personal choices, had to do a reshuffle.

I dare to argue some of the nominations have been at least puzzling. Radoslaw Sikorski, despite my reservations regarding his (feigned) impeccable manners, was generally a decent foreign minister and especially well capable of representing Poland abroad. I doubt given his traits he has all makings of a good speaker of the parliament (what a demotion for him!) and I particularly have doubts how his successor, Mr Schetyna, will rise to the challenge… Nevertheless, Mr Schetyna, designated for one of the most prominent functions, is rising like phoenix from ashes. For years, as an informal opponent of Mr Tusk’s headship in the civic platform, he was on the sidelines of the Polish politics, for many bound to stay in the background until eventual withdrawal from politics. His sudden comeback is a great chance for him, but also, to put it mildly, an enormous challenge.

Mr Grabarczyk in charge of the ministry of justice… sounds ludicruous… I particularly dislike the chap (as I not tend to like people who hold their head up high) and if there is a person in the Civic Platform that could embody hubris and arrogance the party has recently stood for, Mr Grabarczyk can serve as an excellent example.

Another would-be minister who in my subjective opinion might not be the most qualified candidate, is Maria Wasiak, the new head of ministry of infrastructure and development. The very ministry, by dint of intricacy of issues it deals with, needs to be run by a person who is not only competent, but also, as Mrs Bienkowska, have balls. She was the CEO of Polish State Railways since 2011 (acting since 2010) and I do not see a significant turnaround in the workings of the Polish Rail Transport, although things could have been far worse and choice could have been far worse, given media speculation of Mr Nowak’s comeback…

I wish the new ministers all the best in their new roles, bearing in mind for some the tenures will be short. When I look at the make-up of the newly formed government, I hold the view it has been brought together to last out until the next election. And because most likely it will be less efficient then the one headed be seasoned prime minister Tusk and with fewer competent experts, odds of PiS winning the 2015 parliamentary election have just risen. Mr Tusk and Mrs Bienkowska have already made their leaps forward and jumped into EU-marked lifeboats. I am pretty sure they will foster our interests there (keeping in mind their mandate is to primary represent interests of all EU members), but Civic Platform’s strength in the Polish politics is bound to wane without them on board…

Sunday, 31 August 2014

A leap forward

I could find no other idiom to fit better what nomination for European Council President for prime minister Tusk is. In Polish, the phrase ucieczka do przodu, has a slightly ambiguous meaning, since it denotes a situation in which somebody take steps to be better off, but also in order to evade troubles or shirk responsibility (this is what he also does). The proposal to entrust Mr Tusk one of the most prestigious positions in EU administration fills me with pride, but also brings to mind some ponderings upon the impact of this nomination on Mr Tusk’s career and on Polish politics as a whole.

No matter if you embrace or reject him, Mr Tusk will go down as the first prime minister in democratic Poland to have been re-elected and to have held the office for at least seven years (or almost two terms). He cannot be denied drive and charisma thanks to which he has headed his party for many years, but the same traits helped him eliminate dissenters inside the grouping. His speeches were compelling and millions of Poles fell for them, although time proved many of his words had been hollow. He attained a lot in the Polish politics, he and his party after seven years of being in power have grown so complacent that from some point the only natural direction of their evolution has been downhill. Poles have become kind of fed up with policy of lukewarm water, pursued quite well and although the country is run ‘up to the mark’, some kind of displeasure pushes them towards a change…

The opportunity to take up a prominent EU seat is the one which ought not to be missed. If Mr Tusk seizes it, he will get his last chance to step down in glory. After the next parliamentary election he would eventually step down in disgrace, no matter if he won the election, only as the lesser of two evisl, or if the winner was Mr Kaczynski.

The move leaves Mr Tusk’s party devoid of charismatic leader who used to be in charge of it from the very beginning and kept it together for years. Many candidates will surely have designs on his position, however I dare to suspect cards have long been handed and wait to be unveiled, so his successors have been designated and wait to take charge… The Civic Platform after Mr Tusk’s departure to Brussels might equally well emerge stronger, reinforced by the success of its many-years’ commander-in-chief, or might fall apart, dragged down by chieftains scuffling for headship.

The opposition in unison congratulated Mr Tusk on his success as this in fact is primarily a distinction for Poland and even Mr Kaczynski expressed his backing for the prime minister’s candidacy. Politicians from all parties are probably silently closing ranks before contingent early elections. For all actors of the political arena in Poland accelerated parliamentary elections might mean a blessing as well as a curse. All of the sudden they may either benefit from low support for the ruling party or fall victim of Mr Tusk’s promotion which might bolster up the position of his party.

Time will tell how things shape up in Poland, but today, I am immensely proud a Pole will head one of the EU institutions. For Poland it is a well-deserved position and Mr Tusk, let’s face the truth, is one of few Poles who could be short-listed for such job, despite some shortcomings, e.g. his insufficient command of foreign languages which was mentioned several times. I cannot imagine Mr Miller or Mr Kaczynski or any of the prominent politicians from the opposition not even holding such position, not because of their incompetence, but seeing them striving for being considered as a candidate, rubbing shoulders with European leaders is beyond my imagination…

Sunday, 1 June 2014

Resurfaced to the right, departed to the left

A hommie [homosexual] is a natural being. They’ve been around for millennia and haven’t bothered anyone. While the gays are ordinary loots imported from abroad. Most of them aren’t even hommies. They are paid to pretend to be hommies. Those imported from abroad persons pretend to be hommies, for money, money paid to break up society and impute wacky principles.

When a woman has a pimple on her face, she’d rather stay at home. And so should the disabled do.
It’s not about aesthetics; there is one tenet in the society: who keeps company with the wolves, will learn to howl, hence watching, incidentally admirable, efforts of para-olympic sportsmen might bring about disruptions in one’s fitness. If we want mankind to develop, we should watch only beautiful, strong, honest and clever people on TV, not deviants, murderers, weaklings, losers, idiots and, alas, the disabled.
We might be happy the disabled organise championships. But what they do, has little to do with sport. You could stage chess tournament for morons equally well.

I belong to so-called secular right wing. This means I am Catholic and hold high the role of religion in the society, but I am against interference of churches (particularly the Roman-Catholic church) into politics. (…) Nevertheless, the Church not only trades in hope, but also convinces people to live in decency. The price for this is worth paying. The other story is whether we are not paying over the odds. Too fat priest is usually a bad priest!

Each kind of socialism, including euro-socialism, is a system based on slavery. And such system is economically inefficient, as evidence proves. Young people sense it and flee. Poles flee to the UK, the Britons flee to the USA… While politically mature Europeans deal with problem of number of votes Poland will have in EU Council vs. the number allocated to Germany. What’s the difference whether Europe is ruled by a socialist sap from Germany or from Poland? A socialist is a socialist, regardless of his political membership and should be returned to re-education camp. Topic closed.

I’d love to disenfranchise many citizens, not only women.
A woman becomes infested with views of a man with who she sleeps. After all a male was designed a such that thousands of spermatozoons go to waste; they morph into a woman’s body and turn into image and likeness of a man she belongs.
Women must not be too clever. The natural evolution mechanism sees to it. An intelligent being would not withstand keeping company to a babbling child for more than an hour. For such reason (and not only) men prefer not to start relationships with intelligent women. Their instinct tells them their offspring should have proper care.

The gist of democracy is that if sir and lady and I are on deserted island, then by majority of votes we can resolve that the lady will go to bed with sir and with me interchangeably. This is how democracy works. And if we have supermajority, we can sign it into the constitution…
How can a system, in which two drunkards have two votes and a university professor has one vote, last? It takes to be an idiot to feel good in such system.

The outrage about paedophilia is disproportionate. Lewis Carroll (the author of Alice’s Adventures in Wonderland) was fond of eight-year-old girls. Not just his neighbours, but also ladies from upper classes would send their daughters to his home, being thoughtful of the fact being touched by a man (moderately, within limits) rises up womanhood and helps rather than harms and makes immune to similar courtship in the future. Of course, coercing anyone, not to mention intercourse, or heaven forbid raping, should be severely punished.
I demanded that prosecutor’s office initiated an inquest into effecting paedophilia at schools. I would personally prefer that my daughter is taken care of by a paedophile (not rapist), who’d spank her buttocks, grope her breast, caress and kiss, than if she was to attend such lesson at school. Encounter with paedophile leaves the precious shame and erotic tension, while such lesson at school would result in irrevocable loss of ability to love.

If you had little notion about women, you’d know man always rapes a woman a bit. Women always pretend to resist. You should know when you can make a step, and when not.

We’ll sell [the European Parliament edifice] and turn it into a brothel. The building would excellently serve such purpose.

Jumping out of a window from sixth floor is definitely more detrimental than taking in heroine, however putting up six-floor high buildings is not prohibited.

You can tell all the quotes are example of a joyful oeuvre of a lunatic. No matter, whether the author of all those statements is indeed out of his senses, beyond all doubt he will be one of Poland’s representatives in the commencing term of the Euro-parliament.

The Congress of the New Right [Wing], under the command of its charismatic leader, scored over 7 percent of total votes in the Euro-parliament election in Poland held last Sunday. Having gone through several plights (totalling to more than twenty) in each consecutive election, out of the blue it rose as phoenix from ashes. Nevertheless, its good result should not come as a total surprise, as in the parliamentary election in 2011 it was not much short of exceeding the 5% threshold necessary to mark presence in the parliament (Polish or European). The party is ultra-conservative in social terms and ultra-liberal in economic matters, hence abjectly euro-sceptical.

The high score of JKM’s party could be attributed to low turnout (less than 24%) and general disgruntlement with current shape of political arena in Poland, monopolised by power-wielding ruling party and ever-lasting as opposition another party.

The Congress earned so many votes thanks to support from the youngest electorate. Voters aged 18 – 25 put a cross mostly against JKM’s grouping. If only their votes had been to decide who would win the election, the Congress would go first, PiS second and PO third. The Congress’ success is somewhat similar to emergence of Palikot’s movement in 2011. The party was riding the wave of anti-clericalism spurred by rows surrounding the cross outside the presidential palace post late Lech Kaczynski’s death. They attracted young, tolerant people by socially liberal agenda. During their presence in the parliament they proved in fact they had little to offer and hence in this election, despite allying with some of leftist politicians who had forsaken SLD, its score was below 5 percent threshold.

Many sociologists claim many people who voted in 2011 for Palikot Movement, this year cast votes for JKM’s party. Given the ultra-leftist agenda of the former and ultra-rightist of the latter, the turnabout is likely to prove the voters’ instability and immaturity. I doubt the Congress of the New Right has a cure for all problems plaguing Poland and the EU. Calling all politicians socialists, thieves, proposing to put them all to prison and establish full economic freedom, based on ‘survival-of-the-fittest’ principle would lead to a huge anarchy, rather than to common happiness and well-being. Nevertheless I recognise there are masses of people so fed up what the state of affairs around that they have reached the point in which they have nothing against current order being torn down and taking the risk of starting everything from scratch.

The prospects for the EU are bleak. If one-fifth of all seats in the European Parliament have been taken over by far-rightist euro-sceptics, it clearly signifies trust and belief in the European Institutions had been undermined. The EU is going through its deepest crisis since inception and it is a crisis of self-focus. The EU has reached the highest stage in an organisation’s development, namely its bureaucratic structure has sprawled so far and wide that it can easily waste all its potential on dealing with its own affairs…

The outlook for Poland is miserable as well. Two major parties are going neck in neck in terms of backing. PiS, for the seventh time in a row, enjoying the status of election runner-up, for the first time has seriously caught up with PO. If no major change takes place, i.e. PO will carry on wallowing in complacency, PiS is bound to win the parliamentary election next year (but unlikely to win the presidential election, as in the run-off voters of all parties are likely to unite against PiS). The other story is that it will be rather unable to find a coalitional partner, so endless squabble will become the daily bread…

----------------------------------------------

Predictably, the funeral of general Jaruzelski triggered disputes surrounding not only evaluation of his deeds, but also whether he should have been buried on Powązki Military Cemetary. Eventually it had been decided the funeral would have partly-state character. I personally found the setting thoroughly appropriate. Mr Jaruzelski was buried not among statesmen of merits but among his fellow soldiers with who he fought during WW2.

The sermon by the priest and president’s speeches were wise and balanced and suited well the circumstances and tragic biography of the general. State and church officials rose to the occasion on the funeral day, while those who gathered outside church and sparked row on the cemetery, did not. Most of those people are probably ardent Catholics and sometimes should be reminded as the general departed, only the God has the power to judge him. It does not mean we must refrain from mentioning heinous episodes from general’s biography. Anti-Semite purges in Polish army, commandeering fraternal aid to Czechoslovakia, responsibility for December 1970 massacre, ambiguous assessment of martial law as the lesser of two evils (or coup d'etat) are still drawing a divide line in Polish society – all those facts cannot be erased, nor forgotten, but in the name of mercy a Catholic should exhibit, sometimes it is better to shut one’s mouth.

Sunday, 18 May 2014

Racing for seats

Since the inception of the blog, before each and every election, I felt a sense of excitement; I felt the election was a meaningful event, a groundwork of democracy, an act by which when casting a vote, a citizen, by entrusting wielding power to authorities, plays a vital role in shaping a future. This year, a week before we elect deputies for the next five-year term in the European Parliament, I feel nothing except for indifference. But next Sunday I will visit the polling station, but only out of a civic duty, because I have been brought up to exercise my rights in democracy, not because I feel it makes sense.

The reasons for my joyless attitude are ample. I could go on about the general fatigue with politics, spurred by seeing politicians making politics rather than pursuing policies, but I will briefly (exam in three weeks, do not expect drawn-out contributions) focus on four aspects I fail to put up with.

Firstly, how big is the influence of Polish deputies on well-being of Poland and Poles? For sure higher than marginal, but nowhere as significant as this exerted by decision-makers in Poland. We need efficient and competent deputies to create good laws and foster interests of Poland in the EU.

Secondly, the reputations deputies from Brussels have earned, on account of their numerous privileges. No matter if they show up on sessions and committee meetings, take part in voting, they deserve sky-high wages, subsidies for running their offices and several perquisites (flats, hotels, flights, etc.). Many candidates race for a cushy job for five years that would allow them to set themselves and their families up for the rest of their lives.

Thirdly, the campaign which revolves around issues we have in Poland. This issue of subcontractors building motorways is a domestic problem and it will not be resolved in the European Parliament, as Mr Liberadzki (SLD) says. Problem of queues to doctors should be tackled by the ministry of health in Poland, not by guys in Brussels, keep it in mind, Mr Palikot. JarKacz, as the spokesman of his party, Mr Hofman, claims, suspends campaign to set off to southern Poland to monitor flood danger. Then JarKacz turns up there and keeps on running campaign, by saying the government is guilty of not modernising enough many kilometres of embankments… Platforma in its spot instead of laying out its agenda of what they want to do for Poland in the European Parliament, ridicules Mr Hofman for showing off the size of his penis, Mr Karski for damaging hotel equipment in Cyprus, while being under influence, Ms Pawłowicz, for her condemnable statements. Voters have heads screwed in and are capable of assessing how much (or rather how little) these PiS politicians are worth. What all parties stand for is a huge crying shame!

Fourthly, the candidates. Everyone who is alive, rushes for European parliament (or put it straightforward, for cash). Mr Kurski, infamous for speeding and absence on parliament sessions, whose presence in European Parliament consists in making politics in Poland, in on every second rear of public transport bus and on every third billboard, makes me want to puke. Parties presumably had serious problems compiling lists, as they had to put in former sportsmen (Otylia Jędrzejczak, swimmer – Platforma, Tomasz Adamek, boxer – Solidarna Polska) or celebrities (Weronika Marczuk, known as victim of anti-corruption bureau – SLD, Izabella Łukomska-Pyrzalska, known from centrefold of Polish edition of Playboy – Twój Ruch Europa Plus). What the hell are competencies of those people to sit in the European Parliament?

If I can advise who to vote for… In short – for those who are well-versed in the European issues and have track record of arduously toiling away in Brussels, not blowing their own trumpets in Poland!

Thursday, 1 December 2011

So whose speech Mr Sikorski delivered?

Being rather short of time over the working week, I was not aware Mr Sikorski was going to put in an appearance in Berlin. I found out about his comment-provoking speech from Charles Crawford's (former British ambassador to Poland) blog, to which W-wa Jeziorki links, on Monday late evening. I went through the post quickly and recalled Janusz Korwin-Mikke's (Polish ultra-rightist politician) words that if your enemies (for many wacky politicians almost every politician from abroad, except our beloved allies from the United States, who incidentally not only do not know where Poland lies, but also do not give a shit about our well-being) praise you, you might be in trouble. Then I put myself to bed and simply forgot about the speech. The next day the row over the content of Mr Sikorski's speech, verging on accusations of high treason, broke out. Along with politicians of ruling coalition and leftist and liberal opposition, I would (silently) stand up to Mr Sikorski's efforts to mark our presidency. Today, while sipping tea after lunch I popped by TVN24 website to learn that Mr Crawford could have authored the outstanding speech.

Bearing in mind that Mr Sikorski, despite having studied and spending over ten years in the UK, is not a native speaker of English, it surely was a wise step to hire a skillful native to have the speech polished up by a professional speechwriter. I do not believe it was Mr Crawford who wrote the speech himself. Polish foreign office, Mr Sikorski and Mr Crawford claim in unison Mr Sikorski took Mr Crawford's advice regarding content and style of the speech and it seems to be a fair account of former British ambassador's contribution.

What I find appalling anyway is the glowing praise coming from Mr Crawford. If he really contributed to the speech, he should have dissociated himself from dissecting and extolling it. Blowing one's own trumpet in such a coarse way somehow does not befit a renowned diplomat...

Sunday, 6 November 2011

Shame on you if you fool me once...

…but shame on me if you fool me twice. Sometimes sayings that refer to ordinary life apply to politics and economy as well.

Have you ever wondered how many times have Greeks double-crossed their breadwinners from the EU? Greece joined the European Economic Community in 1981. I have to plead I know little about the backstage of entrance to European Communities at that time, but from what I remember at that time a country which applied for a membership did not have to meet any quantitative criteria. From that point being a member of EEC has helped Greece make a big stride, yet not in terms of development, but in terms of standard of living.

Things have changed after the Maastricht Treaty was signed and took effect. It laid foundation for single currency area and set requirements a country which wanted to join it had to meet. Two of them referred to soundness of public finances – each applicant had to keep general government deficit below 3% of GDP and the whole public debt could not account for more than 60% of GDP. These are figures, and whenever statistics are in use, room for tampering can be found. Here’s the rub – when calculating the public debt a country was allowed to legally subtract some of its liabilities. The main method of concealing some of debts was using complex financial instruments, mainly cross-currency swaps that allowed the Greek government to issue bonds in other currencies at “arranged rates” and with deferred maturity. The operation that helped Greeks dupe the EU was brought off in liaison with Goldman Sachs (the bank that rules the world, there is more than just a grain of truth in this assertion). Thus in official statistics the debt was curbed, in fact it morphed into time bomb that would blow up Greece’s public finances in a few years.

For many years Greek sovereign bonds were treated as safe investment. When banking crisis in 2008 reached its zenith, many banks in Europe, including Dexia lost millions on toxic US mortgage-market-related assets, but then received capital injections. This money was parked in safe havens. One of them were Greek bonds. Collapse of Greece’s public finances came to the light in September 2009. From then on, Greece has faced insolvency many times. For the first time it received a bailout package in May 2010. Over 100 billion Euros let the country avoid bankruptcy then, but this was just the first injection of never-ending drip of money. To borrow money on preferential terms from the EU and the IMF, Greece had to implement painful austerity measures. Greeks, pampered by overgrown welfare system, went to the streets to protest against dreadful retrenchment programme. The country repeatedly came to a standstill, strikes exacerbated economic contraction and debt-to-GDP ratio soared.

In most European countries the crisis was sparked by excessive expansion of deregulated banking industry, mainly consisting in reckless mortgage lending. In Greece banking sector stayed relatively healthy. The overgrown welfare state and lack of competitiveness of Greek economy were the nails used to close the coffin of Greece. Many privileges, despite social unrest, can be scrapped, but structural changes are will not be easily brought in, given the mentality of Greek society. Big grey economy and widespread claimant stance (postawa roszczeniowa) will be a stumble block. Greece must not only cut ridiculous expenses, but also take steps to boost its tax revenue base. Tax evasion must finally be severely punished, wages must finally be linked to efficiency. It sounds simply, but Greece has to get to grips with bigger challenges. In needs to carry out structural reforms to make its products and services sellable on global markets. It would be easier if they could be sold at lower prices, but as long as Greece is a member of the Eurozone, devaluation of currency does not come into play.

Solidarity is a glue that stick together the European Union. Poland is also a big beneficiary of this. As a poorer country we receive lots of money to modernise the country. A big leap being made in infrastructure development can be put down the inflow of EU funds, but life is not only about taking, but also about giving. One country should not sponge on other, as Greece has done. And if other countries bail one country out, it should not come up with ideas such as the one to call a referendum whether to accept another tranche of bailout package, subject to another dose of painful reforms.

Someone finally should bite the bullet and pull the plug on Greece. I would simply let it go bust, let banks write down or write off value of Greek bonds (most creditors of Greece are capable to absorb such losses, although it would be a blow to their shareholders). I would even let it start from scratch. But even in such scenario, I seriously doubt if Greeks would learn from their mistakes. They would rather be taught that if creditors let them get away with not meeting their obligations, that they can carry on living off other countries’ backs.

The Euro, as a currency, as well as the Eurozone, are political, not economic undertakings and for that reason no one will have the courage to kick out Greece from the eurozone. Admitting one’s defeat is a bitter pill to swallow, but in my view, this painful solution would in long-term turn out to be best, and less costly than pumping next billions into a bankrupt country.

Saturday, 18 June 2011

Are we in 2008?

The title sounds at least weird, but this is exactly what occured to me quite recently. A few days ago I waited for my friend outside her office and I remembered the time when we met, during our internship at M********* Bank, it was in summer 2008. We looked back on those times and I put our memories into a broader, economic perspective. Then I discussed it with my colleagues at the office and they shared my observations. Three years have passed and economic situation is disturbingly similar to that in 2008. Just come to think of it...

There is a rally on commodities market, just like in 2008.
Rising prices of commodities have sent the inflation rising, just like in 2008.
Stock market has been underperforming for while, although scale of the correction is not as huge as in summer 2008 when the correction turned into a full-blown bear market.
Pace of GDP growth in developed economies is slowing down just like in 2008, there is a serious threat of double-dip recession in Japan and United States.

In 2008 world saw a spectacular turmoil on financial markets following the bankruptcy of Lehman Brothers bank. In 2011 we might witness a similar disaster. This time the biggest sore points are Greece and USA.

Problems of the former have kept us company from May 2010, when it transpired the country would be soon unable to roll over its debts. The default was somehow staved off with a huge bail-out package, but the issue remains unresolved and pain in the necks of European politicians and bankers is getting more and more severe. For the last 13 months Greece has been effectively a corpse, artificially kept alive by a drip of money flowing from the IMF and EU. If it hadn't been for those loans, the stricken country would have gone insolvent on 19 May 2010. This was fended off by the EU mostly because bondholders of the Greek government are mainly French and German banks, which had bought Greek gilts after collapse on sub-prime securities market, as government bonds were at that time deemed to be a risk-free investment. Those banks, if Greece defaulted on its debts would have to write off large sums of money, losses would deplete their equity, or even gobbled them up at all. To prevent a knock-on effect, governments would have to shore up capitals of those banks, but in 2011 it wouldn't be as easy as three years earlier. Then government bonds were treated as safe haven and so called "investors" were eager to help the governments meet their borrowing needs. Today, as government bonds are more or less risky assets, it would be impossible to finance another bank bail-out programme, or at least it would be hard, as potential debt buyers would require a generous rate of return. EU countries are bending over backwards to stave off the Greek disaster, but this looks unfeasible. If the next tranche of the EU / IMF funded rescue package is to be disbursed in July, Greece has to pass an austerity programme that would involve tax hikes and painful cuts in expenditures. Greeks, accustomed to welfare and bunking off, don't give a green light to the programme and the odds it will be carried out are getting lower. If Greece fails to meet requirements set by its lenders and the lenders don't give in and turn a blind eye on Greek governments fecklessness, the real bankruptcy is in the offing. And even if the next tranche is disbursed, problems of the country and its creditors won't be solved, but only postponed. Best case scenario for bondholders is soft restructuring, meaning write-downs on Greek government securities will bemade over time. And Greece itself is poised for a downfall, well-earned downfall... Grrece has long been effectively bankrupt. Everyone realises it, and everyone is afraid to speak it out.

USA are in a slightly better situation. For no apparent reason their debt is rated AAA, despite the fact the country is on its way towards a technical default. If the congress, where republicans have the majority, doesn't raise the debt ceiling by 2 August, the US government will have no money to buy back its treasury bills (by rolling over the debt), what means effective insolvency. Funnily enough, rating agency can downgrade US rating only if the debt ceiling is not increased. So if they keep on running up debts, triple-A rating would be reaffirmed. A farce? No, this is real, so the rating agencies grading US debt as prime investment are in for a disredit comparable to the one with sub-prime securities and Lehman rating. But United States have a way with its creditors that Greece doesn't have. USA can print as much money as they want and monetise their debt - this is the only way it will can be paid off, with the detriment to those hapless guys who hold US treasury bonds. I hope Barack Obama's face will adorn $10,000,000 banknotes and Ben Bernanke will deserve to look at Americans from a $100,000,000 note.

I'm looking forward to both imminent defaults. Both wretched Greece and wretched United States have worked hard to go default and there's no point in averting it. Of course many economists and probably all politicians would disagree with me and do their best to ward off the bankruptcies, as these bankruptcies would give rise to a turmoil on financial markets much bigger than the one following Lehman's collapse. Indeed, they would, but we need to suffer this stress to clean the air and finally learn the lesson from the crisis. Price for living beyond our means should finally be paid, conclusions should be drawn, bail-outs should become thing of the past, moral hazard should recede to the realm of academic discussions on economics.

But they won't...

And please don't ask me what the safe haven for money now is.
Government bonds - no longer
Stocks - will plummet
Commodities - will plummet
Bank deposits - why not, but given the current inflation profits in real terms are negative.
Gold - seems overvalued
Properties - somethign tangible, but don't expect the market value to increase in the coming years...

Sunday, 4 October 2009

Where you stand depends on where you sit

So why should they check if the third time is really lucky, if the second was twice as enough? The Irish voters chose on Friday to adopt the Lisbon Treaty, which they rejected in the previous referendum, held on 12th June 2008. Their decision, this time totally predictable doesn’t necessarily prove their support for the further integration within the European Union (though the framework of the process was vastly abridged in comparison to the draft of European Constitution), but it’s an excellent evidence for the old, but still up-to-date Polish saying: “Punkt widzenia zależy od punktu siedzenia”. In the last months before the outbreak of the financial crisis Irish citizens were definitely reluctant to embrace the document. Now, after their country has been hit be the crisis (the rapid rise in unemployment may serve as the best indicator) and its financial sector has been bailed out by the government they simply seek more security, which in their view can be given by the EU.

People’s views quite often depend on their situation. The disadvantaged, the poor, the unemployed usually tend to support socialists, whereas entrepreneurs and the well-off back liberals. My generation more and more often gives lie to that tendency. Some of my friends from university come from poverty-stricken families but their favour liberal solutions. The group of the ones from wealthy families eager to share their income with the poorer is still rather sparse, but the society is drifting in a good direction. That road will be long and rough unless the public figures realise they should serve as an example in this respect. How can an ordinary citizen stick to his views if the politicians change their minds according to the PR needs or if many biggest figures of financial sector claim less regulation when the business goes well (like in 2006 or 2007 in banks) and when they face serious troubles, they submissively queue up and beg for help from the public purse?

I could write more about those partly moral choices. Unfortunately, I’m short of time this weekend. My school, after the Office of Competition and Consumer Protection levied the fine of 270 thousand złoty on it, has launched a new austerity programme under which students are obliged to give lectures instead of lecturers and I have to prepare for the first one I’m delivering on Thursday. Well, to be precise it’s not a new internal regulation, but more and more lecturers shift the unpleasant duty of giving a lecture onto the students. It takes on a form of blackmailing – if you don’t do it, you won’t get a credit… I think it’s the third time within my course of studies when the teacher just sits and watches the presentations of students without making a substantial contribution. Is this the way the “leading” Polish school of economics” wants to catch up with the western universities. It’s a downfall…