Swiss Francs, no easy way out

One of pre-election campaign promises made by president Duda and the bevy of politicians he hails from was a bail-out for FX mortgage borrowers ensnared into toxic loan agreements and trapped in their unsellable properties for years to come.

In January 2016, exactly a year after the Swiss currency had been freed to float, Mr Duda’s office laid out a proposal of converting CHF mortgages into PLN at a “fair rate”, different for each debtor and reflecting benefits received by debtors on account of favourable CHF/PLN rates before September 2008 and lower interest rates in CHF (for broader explanation in plain language click here and scroll down to the third paragraph from the bottom). The proposal has been assessed as hazardous for the Polish banking system and… shelved. Five month on, the sketch of the solution has not developed into a draft law ready for legislative process… Which is reassuring, since if Mr Duda’s experts are mindful of dire consequences of banks going under or loss of trust among foreign investors, they have held back from pursuing it and set out to reshape the proposal…

On Tuesday the “CHF task force” held a fifty-one minutes long conference, during which they attempted to outline the major conclusions of their work on the bail-out scheme until now. I will be nasty, but I will exercise my right to speak it out… This was one of the most ludicrous conferences I have ever seen in life. I have got accustomed to listening to politicians who speak a lot and say nothing. This time self-styled economic experts have told a story of guys who met up several times to sip coffee, munch biscuits and waffle on quandaries of benighted individuals who wanted to chase their dreams too much…

OK, the malice cap has been reached, time to move on to what audience have been spared, namely details…

The participation in the bail-out will be voluntary, what in practice means some better-off borrowers might not decide to get rid of their Swiss Franc burden, in practice they will continue to bet on depreciation of CHF in years to come. I personally know people who accumulate savings and hope one day they pay off their whole mortgage with one shot at favourable CHF/PLN rate.

The bail-out package consists of several measures distressed debtors could choose between, however I still cannot make out whether they are mutually exclusive or not.

One interesting measure which could theoretically be implemented with another one is the obligations to lenders (banks) to refund the borrowers the overpaid currency spreads. I came, I saw, I did not understand at all. This concept leaves more questions than answers. Firstly, what would constitute an overpaid spread? Banks naturally earn on difference between rate at which they buy and sell foreign currencies, whereas the problem with the CHF mortgages was that spreads were far higher than reasonable (bid-ask spread often above 6%)… So would lawmakers define a reasonable spread banks had been entitled to charge, or would they set National Bank of Poland rate as benchmark? Secondly, would banks give this money to borrowers’ hands or would they obligatorily prepay mortgage loans? Thirdly, would the refund include penalty interest accrued for period between it had been unduly charged and the day of refund? Fourthly, would the measure cover also instalments paid after August 2011 (enacted swiftly the PO-PSL government in reaction to soaring Swiss Franc) when the anti-spread law (amendments to the banking law) came into force?

Fifthly, facing the truth, the banks were not prohibited by the law to rip off borrowers, so would reversing it be interpreted as violation of the precept that law is not retroactive?

The concept of the “fair rate” has been revisited in the presentation. The expert spoke of four variants of the fair rate, however decided to share only two of them with the audience. One draws on the algorithm presented in January 2016, the other would additionally take into account current well-being of a borrower, with debt-to-income ratio (percentage of after-tax income spent on instalments) a key criterion. The very concept of what is “fair” and for who gives ample room for disputes and will most likely by one of moot points if works on the bail-out scheme move on.

Another measure, whose legal feasibility is questionable, is the option for a borrower to extinguish their mortgage debt by renouncing ownership of the mortgaged property. In Poland mortgage debt has recourse nature, i.e. a debtor is liable for it with all their present and future assets. Such scheme again casts doubts whether law does not work retroactively (a bank when it was granting mortgages, relied in creditworthiness assessment on claim on debtors’ assets and income). Incidentally, introduction of pure non-recourse mortgage lending under which a lender could recover from collateral only, could civilise Polish mortgage lending, but at the expense of higher cost of such debt, being the compensation for lenders for relinquishing the recourse to debtors.

The professors mentioned in passing 30 billion PLN as the total cost of their proposal (which one exactly?). No one still knows how their arrived at that figure, but to be honest, to my best knowledge none of the figures presented by any participant of the CHF debate has been backed by substantive calculations or estimations holding water.

The experts (I pull a grumpy cat’s face when I write this word, as Poland’s current ruling elites lack backing of competent experts) also claimed the effects of the bail-out would be spread over around 30 years, yet failed to explain how such spreading over time be brought into line with International Financial Reporting Standards which proscribe to recognise a loss in full amount in the period an entity learns it is going to incur the loss. One of the task force members murmured something about SPVs and securitisation as tools for spreading the cost over time. A word of explanation here… SPVs are used by banks to remove loans from their balance sheets. Some assets (pools of CHF mortgage loans) are swapped for other assets – cash. Hence a bank has its problem solved immediately, provided it sells portfolios of loans to SPVs at face value. If it sells dicey loans at discount, it recognise a loss (or pre-sale write-down) immediately. At this stage the story is not over. An SPV which buys dicey loans from banks must pay cash for it. Cash is an asset which must be funded with equity or liabilities. Who would then provide equity or liabilities? Whoever it would be, they would be exposed to sizeable haircut in their investment, as SPVs would absorb the losses on loan conversions into PLN…

The Tuesday’s proposal has been slated by nearly everyone. Economists criticised it for lack of details (during the conference the task force experts were struggling to answer most questions asked by the audience). Disgruntled debtors, who put faith in Mr Duda’s promises, also do not perceive the unveiled concept of the bail-out package as a step forward.

I suppose PiSites and Mr Duda know well only time may solve the problem of CHF loans and therefore they play on time. Month by month outstanding debt declines as borrowers make repayments and so the scale of the problem diminishes. They fully realise if they run out of money, voters will knock them out of power (if voting regulations are not tampered with), so their spending spree fortunately has halted after 500 PLN child allowance programme kicked off. I bet works on the draft law will drag on for months and by the end of this year the legal framework will not be passed.

Cycling and prudence

Winter has set in. This season of the year, apart from ample drawbacks, has also some upsides, such as absence of insects and one group of motorists you should beware of.

Generally, the warmer it gets, the more drivers give up on their cars and swap them for motorcycles and bikes. They share public roads with four-wheel-vehicle users, but often make advantages of smaller width of their vehicles what drives many car drivers, including me, insane.

Don’t get me wrong dear readers*. My intentions are far from decrying cyclists and depriving them of their right to use public roads. Cycling has several merits: keeps people healthy and fit, provides a daily does of physical exercise for those who otherwise would not find time for moving their arses, saves money and environment. But whatever you do, you should do it prudently and not expect others to think and take responsibility for your deeds instead of you, just because you are weaker [than drivers protected by bodyworks of their vehicles] or privileged [cyclists tend to be hailed as such category of road users].

According to Polish traffic regulations, cyclists should attempt to use the road and ride through pavements only when sharing the road with cars is forbidden or impractical. Cyclists are prohibited from moving on motorways, expressway, fast-traffic roads and other roads marked with relevant signage. Cyclists who use pavements should always give way to pedestrians and take off their bikes when they cross a street. This obligation does not apply when a cyclist rides a cycling path, on which they are superior to pedestrians and have right of way over cars if the path crosses the street.

I should not say “law is an ass”, but some regulations do not contribute to increasing safety on the roads. Let’s examine some imperfections of Polish traffic law and some sins committed by cyclists and motorcyclists.

Every candidate for a driver to get a driving license needs to pass a test in order to prove they know traffic regulations. Such requirement prevents people who know little about traffic rules from causing dangerous situations on the roads. A cyclist who is not under 18, subject to the same traffic regulations, as a road user, does not need to prove their knowledge of traffic law. This results in scores of cyclists blissfully ignorant of perils the may cause or they may be caused by car drivers. I opine that any person riding a bike on a public road has its command of basic traffic rules certified. It can take a little hassle and bureaucracy (that can be easily limited – test materials can be available online, test that costs no more than 50 PLN is taken in exam centre, then a cyclist picks up a piece of plastic, if someone has a valid driving license, the procedure is not needed at all), but could prevent many accidents.

The biggest sin of cyclists is taking a busy road, when there is a cycling path running parallel to it. The classic example is ul. Puławska between the boundary of Warsaw and ul. Energetyczna in Piaseczno, the section where speed limit is 70 kmph. The road was widened to 3 lanes and a very decent cycling path along it was built in 2007. Despite dreamt-up infrastructure, some inconsiderate bike enthusiasts refuse to take the cycling path and share the road with cars, risking lives. Is there any excuse for such thoughtless behaviour?

A common sin of single-track vehicle users which winds me up the most, is moving between lanes (to be precise, on lines marking them out) and thus often slaloming between them. This used to be a domain of motorcyclists and scooter-riders, whose engine-propelled vehicles are much faster and thus have edge over slow-moving cars. When weather permits them to get on their machines, even when my car is not in motion I continuously peek at both wing mirrors and if possible move to other end of my lane to let them overtake me in safe distance. The real nightmare crops up when two motorcyclists overtake me from both sides at the same time – this may happen not only on middle, but also on right lane (I tend to use it whenever I can, as the traffic law instructs), when one motor-rider dashes between middle and right lane, while the other moves on the edge of the right one. I then pray there is a few centimetres space on each side of the car…

The warrant to avoid cycling on pavements also lacks common sense to me. Much depends on the situation. The busier the roads and the faster cars move on it, the more advisable it is for a cyclist to give up on taking it. As a cyclist I do use roads, when I feel safe on them and when my common sense tells me I would do more harm than good by choosing a pavement (one nuisance of riding the pavement is having to cross curbs). When there is no pavement, I use roadside, no matter how bumpy it is. A classic example here might be ul. Karczunkowska, where I never share the road with cars, since drivers tend to speed there. Of course I am entitled to use the road, but what’s the value of this entitlement if I end up dead of disabled? When taking the road, I know responsibility for overtaking me safely rests with car drivers. When taking the pavement, I know responsibility for not harming pedestrians rests with me. I prefer to trust myself. The other reason why pavement could be preferable is that accidents on pavements would not be fatal. Have you ever heard of fatalities when a cyclist collided with a pedestrian? Of course, reckless cyclists on pavements can become ‘road hogs’ and the binding traffic law was designed to protect pedestrians. But what protects car drivers from trauma of running down a cyclist clearly violating traffic rules? Surely, after such accident a police could adjudicate the car driver was not guilty, any court would acquit them, but mental trauma could not disappear until the end of their days.

Any constructive strategy?

- Build infrastructure: cycling paths, cycling racks, expand the bike rental schemes.

- Amend the law: put in place regulations that would require road users to be familiar with traffic rules, allow them to use pavements when sharing a road is too precarious

- Punish mercilessly cyclists who slalom between cars or who use road when cycling path is at hand.

- Rely on your common sense, regardless of your role in traffic.

* I actually wrote the post after almost hitting a pinhead on bike on ul. Puławska last Monday. Around 7 a.m. (was still dark) I was driving up ul. Puławska, approaching intersection with ul. Płaskowickiej. I drove some 40 kmph and was on the middle lane. All of a sudden I noticed a cyclist (he had no lights on his bike, nor any flashing elements on himself who unexpectedly decided to veer from right lane to the left. I pushed the brake, peeked in the right wing mirror and without making sure there was no vehicle in the blind spot (fortunately no car was there) I swerved right to avoid running down the cyclist. I was scared out of my wits…

Pension law - draft released

Five weeks after the general shape of the pension reform was unveiled, the government made public the document which might become the new legal act governing the pension system in Poland. The document is available here, is 47 pages long and… I have taken the trouble to read through it quite carefully.

The text is a compilation of amendments into several other legal acts regulating workings of pension funds, social security system and public finances. For this very reason is it absolutely unreadable for an average reader. In other words, just like most official documents in Poland, the document is a piece of anything, but informative twaddle, whose authors probably have not intended to confuse recipients, but have done so…

May the first article of the draft law give you the flavour of how reader-unfriendly it is:

Art. 1. W ustawie z dnia 26 lipca 1991 r. o podatku dochodowym od osób fizycznych (Dz. U.

z 2012 r. poz.361, z późn. zm. 2)) wprowadza się następujące zmiany:

1) w art. 30:

a) w ust. 1 dodaje się pkt 14 w brzmieniu:

„14) od kwoty wypłat...

Okay, I concede this incongruous form has to be retained for legislative purposes, but a reader who comes across such stipulations, unless equipped with several other acts, has no idea what the paragraph is referring to. My proposal of best practices in such instances is to attach to a draft of new law all other legal acts it changes in “track changes” version. For those unfamiliar with such methods – a “track changes” document marks what has been added, removed and changed – very convenient for readers who need to opine changes or simply quickly find out what has been amended.

The other thing I noticed (not necessarily rightly, as at second glance, I spotted a paragraph setting forth framework for settlements between pillars of the pension system, to be governed by a separate decree) is a potential cock-up regarding the 10-year period before retirement when “money” should gradually flow between pension funds and state-run social security fund. The law states 10 years before planned retirement the social security fund informs a pension fund (to be precise a company which manages it, on its behalf) about the obligation to redeem settlement units amassed by a pension fund participant and transfer money to the social security fund. The capital assigned to a fund participant is divided into 120 equal parts, then 1/120 of all settlement units a pension fund participant has is transferred each month. Amounts of transfer will vary depending on current market valuation of settlement units (i.e. underlying assets). For the whole operation to hold water mathematically, new contributions must not be transferred to pension funds over 10 last years before retirement. Otherwise the moment an employee retires, they would still hold in the pension fund account assigned to them all contributions transferred there over last 10 years, while the government’s intent was to bring the balance of pension fund account to zero.

Contrary to original plans, the choice between private- and state-run parts of the system will not be irrevocable. The decision taken in 2Q2014 might be changed in 2016 and then in 4-year intervals. On one hand this offers additional choice to future pensioners, which is an upside, on the other I fear this option will not work for the benefit of the would-be retirees. 4-year period does not offer enough flexibility for those who would like to benefit from long-term trends on stock market (75% of assets will have to be invested in shares of publicly traded companies), while given the retrospective approach to results of pension funds, many people might choose to transfer their contribution there after a period of substantial rallies (seeing high past returns), just before the oncoming bear market. In the long run this solution is quite likely to incur losses to future pensioners and discourage them from participating in private-managed pillar of the pension system. Maybe the ‘revocable freedom to choose’ has been a deliberate step towards scrapping private-run pension funds at all?

                       

When laying out the blueprint of the reform, government had declared in case of moving government bonds from pension funds to social security fund and writing them off, debt-to-GDP safety levels would be decreased accordingly to reflect drop in official government debt (not to give room for extra indebtedness). As the draft law shows, this avowal has vanished into their air. The law brings forth only amendments to so-called ‘expenditure rule’ which would now be more restrictive in containing unfettered growth of government spending, but 50% and 55% debt-to-GDP levels, serving as a safety valve against reckless politicians, will, unfortunately, be intact.

One of more meaningful changes for future pensioners who will decide to have part of their contribution transferred to pension funds is a decrease of load fee from 3.50% to 1.75%. Slashing the commission charged at each paid zloty means higher pension benefits for system participants and undermines risk-free business of fund managers. Noteworthy is to observe pension fund defenders stance on the reduction. When interviewed, they assert this is a fine move, long overdue and then deftly sidetrack into other aspects of the reform that as a whole are, according to them, likely to decrease overall potential return beyond gains from load fee savings. Actually such stance has been quite common whenever topic of exorbitant fees was brought up – each time there came an ‘expert’ who would claim the government should focus on initiatives that could increase potential returns fetched by pension funds, rather than confining to taking the easiest way out, i.e. regulatory decreasing fees; thus denigrating the importance of low cost of the pension system for its participants.

On Friday I took a day off to make use of the great weather and catch up with some gardening. In the late afternoon I sat back in front of TV, turned over to TVP Info and watched a TV programme dedicated to the pension reform in which the audience were free to call and ask questions representatives of the ministry and pension fund managers, send text messages and write e-mails. The show contained also some footages recorded on the streets of Warsaw with people having their say on the reform and sharing the ideas on how to secure their pension. The picture that emerged from the programme was horrific. The economic ignorance in the Polish society is a crying shame. Most people do not understand how the pension system works and therefore can believe in every lie / misrepresentation / distortion they told about it. Given the level and bias of public discourse, an average Pole who lacks basic understanding of economics is meant to end up confused. Once they hear minister Rostowski saying the government is the best guarantor of pension payouts – this holds water, so why not trusting him? Then they see dr hab. Balcerowicz shouting the government is brazenly seizing citizens’ money to pay benefits to current pensioners at the expense of future pensioners whose savings are depleted – at first sight this also hangs together so they feel like a theft victim. Then they listed to prof. Oręziak who says due to existence of pension funds the public debt of Poland has risen by additional 300 billion zloty and pension funds are a huge burden for public finances that is a ball and chain – so again they think from the taxpayers’ perspective this must be a praiseworthy reform. Then comes up dr Petru who pronounces the government is taking the path of least resistance and instead of seeking savings somewhere else, destroys a good pension system and destabilises it.

Same issues, different opinions. If you are familiar with economics, you can critically assess utterance on the pension system. If you are not, clashing opponents make you even more lost and more indifferent about what is going to happen…

Meanwhile in the capital – soon comes the verdict…

In praise of free speech.

Six o'clock in the morning. Functionaries of Internal Security Agency break down the door and trespass onto a flat inhabited by 25-year-old chap. Are we back in 2006 or 2007 when various people were arrested in the spotlight (some of them have never been proven guilty and acquited)? No, we are in luminuous times when enlighted Civic Platform is in power and civic freedoms are thriving. This statement was borne out on Tuesday when a guy who ran antykomor.pl site had his computer forfeited by secret services, just because he had run a website on which he had ridiculed president Komorowski.

From 2005 several websites were set up with just one goal - to make laugh of late president Kaczynski and his brother who wielded power as prime minister. Politicians of PiS and believers of the sturdy party expressed their outrage at the fact ordinary people wanted to make fun of clunky twins. Usually the key explanation was that all those people couldn't do it off their own bat and must have been inspired by an overarching, invisible force, called the System.

Times have changed. Since the Smolensk disaster it is no longer passe to admit to support Jaroslaw Kaczynski and his party. A group of people who declare they used to be drowned out for years can easily have their say. Antykomor was created in that time, in the surge of anti-PO movement. He did what many people had done during president Kaczynski's term. Let's face it - the current and the previous president have both been mediocre and no wonder such websites spring up. It is quite natural in the civic society, in which people have to have a right to give vent to their emotions.

I first heard about the site after its closure, so google cache memory was my only source of information on the content of antykomor.pl. I have to say I didn't find anything what would justify stepping into Antykomor's author's flat early in the morning, maybe except one photomontage on which the president appears to be compelling a drunk girl to do him a blow job.

This one was below the belt, but the guy should be wise enough to know there are boundaries that must not be overstepped. This still doesn't justify the forfeiture of computer, he could only be requested to delete offensive content and materials he hadn't had copyrights to.

Officiousness is worse than fascism. After the hapless action PiS scores another point and PO slides down on a slippery slope it has been for months of its feckless rule. Who the hell hatched the idea of detaining author of such website? It is absolutely normal in mature democracies that some people are dissatisfied with the politicians in charge of their countries and ridicule them. Think about all mockery at Nicholas Sarkozy, George W. Bush or Barack Obama. I think the article 135, paragraph 2 of Polish penal code which defines punishment for insulting the president (up to 3 years of imprisonment) should be overruled. Why should a president enjoy any special protection? He indeed is a symbol and deserves respect, but other people also deserve respect. So what's the difference between liability for insulting a president and insulting a prime minister. Should only the former be punished? Wasn't the legislator a bit ticklish? Isn't the situation in Poland ludicrous - people who accuse state officials of high treason and felonies go unpunished and the guy who pokes fun at president's numerous missteps has to play host to Internal Security Agents?

I was okay with making fun of president Kaczynski and I am okay with ridiculing president Komorowski (he gives us ample reasons for doing so) and I will be okay if any other president is mocked at, of course within reason, what means with offensive remarks, insults and lies. I was counting down days till the end of Lech Kaczynski's presidency, so why not do same with Komorowski?

The pension debate - foreword

Time to catch up with the pension debate. A long two-part post is in the phase of preparation, due to be published on Saturday (part 1) and Sunday (part 2)

Today's post in the wake of yesterday's debate, to dispel all doubts concerning the owner ship of assets kept in pension funds. Don't let anyone fool you, these assets do not belong to people. Unless you call into question the ruling of the Supreme Court handed down on 4 June 2008. Some crucial excepts below, in Polish, as Poles are involved in the issue...

„środki te na podstawie przepisów ustawy z dnia 28 sierpnia 1997 roku o organizacji i funkcjonowaniu funduszy emerytalnych, znajdują się w ograniczonej dyspozycji ich członków, co może świadczyć o ich częściowo prywatnym charakterze. Jednakże z uwagi na to, iż powstają one z podziału funduszy o charakterze publicznoprawnym, to jest z podziału składki na ubezpieczenia społeczne (art. 22 ust 3 ustawy o systemie ubezpieczeń społecznych) stanowią formę realizacji zadań w zakresie zabezpieczenia społecznego wynikających z art. 67 ust. 1 Konstytucji RP (…)

System emerytalny ma charakter powszechny i jego celem jest urzeczywistnienie zawartego w art. 67 ust. 1 Konstytucji prawa każdego obywatela do zabezpieczenia społecznego na wypadek osiągnięcia wieku emerytalnego. Nie został on skonstruowany przez ustawodawcę dla indywidualnych ubezpieczonych (…)

…system emerytalny oparty na zasadach ubezpieczeniowych charakteryzuje się przymusem ubezpieczenia społecznego związanym ściśle z obowiązkiem odprowadzania składek , a powstający z mocy przepisów ustawy systemowej stosunek ubezpieczenia społecznego ma charakter publicznoprawny. Inaczej rzecz ujmując, środki na ubezpieczenie społeczne, w szczególności emerytalne, są i będą przeznaczone na wypłatę świadczeń dla innych podmiotów aniżeli mich płatnik i w tym znaczeniu są środkami publicznoprawnymi (…)

Składki na ubezpieczenia emerytalne nie są prywatna własnością członka funduszu (…)

…składka emerytalna, z uwagi na jej przeznaczenie na tworzenie funduszu emerytalnego, posiada publicznoprawny ubezpieczeniowy charakter, który zachowuje nadal po przekazaniu przez Zakład jej części do funduszu.”

Almost three years have passed and I still feel sorry for Mr Mielczarek, a financier from Warsaw who waged war against pension funds on his own and lost it...

To be continued on Saturday and Sunday...

Where are the limits of freedom?

“On your knees, dog!”, a young man with a face untainted with a single thought aims a gun at a policeman. What does it look like? A scene from a film, a passage from a next coverage of tragic event in Warsaw? No, a new advert which appeared in one of Polish skateboarders’ monthlies. As the author of the picture and co-owner of a textile company which ordered this ad, there is nothing reprehensible, since the idea of threatening a policeman with a gun hatches in every young skateboarder’s head.

Now let’s take his reasoning apart. He claims a normal teenager dreams about killing or at least humiliating a policeman in service. The taste of revenge is for sure sweet, so every mentally healthy person would get their own back on their persecutors – is this how it works.
It’s just an innocuous joke, remember about it when you see a similar scene on a street. Just pass by and don’t try to react. Let guys have fun.

Everything has its limits. Everything but the human folly. And what are the limits of freedom? Other men’s freedom and, in any society, generally accepted social norms. In Poland, although it is still catching up with the West, people generally agree that people who aim guns at policemen are criminals.

So what can be done about this. The advert was published only in a niche magazine, I don’t know whether it has to comply with ethical standards of advertising. In my view the punishment should be the most severe, what in my books means financial. Those who have come up with the idea and those who have allowed it to be published should be fined heavily. If those retards who had thought it up had to pay one million zlotys for this stupid ad, the likes of them would think twice before they would something equally silly.

Sense of justice

This week residents of Warsaw witnessed the events which should have prompted them to reconsider what just is and what is not. And it’s not as black or white as it may seem to look.

On Monday (the day before yesterday) two burglars broke into an antiquarian shop in the centre. One of them ran away quickly, frightened, as the shop assistant didn’t give up easily and got into a scrimmage with his companion. During the fight the shop assistant took away a knife from a thief and stabbed him. Both men were taken to hospital where the intruder died.

Soon the readers of TVN Warszawa portal hailed the antiquarian who had put up resistance to burglars as a hero. At this point we begin to draw on our moral principles. Has a man a right to take away his fellow man’s life? According to the Catholic Church teachings (and as the statistics show, over ninety per cent of Poles declare themselves catholic, so they should follow some principles), never. According to the law, he could have killed a robber unintentionally, in self-defence, this has to be investigated.

What caused such a reaction of readers? Firstly they looked up to him for his bravery, secondly, in their sense of justice the burglar was no one else but a pest, which posed a threat to society. The shop assistant has eliminated a human being whose existence was perceived harmful for the rest of society. In this respect, his deed was considered beneficial, for two reasons. Firstly this man will not break into any other shop, will not steal anything, will not do his time in prison, financed by taxpayers, and secondly other thieves will be scared and this accident may put them off trying to steal something.

Since the burglars attempted to break into my house in September I have been thinking about how I would have behaved if my neighbour had not scarred them away. For sure killing anyone, including the worst scoundrel would be out of question, my conscience would not be clear until the end of my days, but I would have to remorse to break his arm or leg? For someone who uses a crowbar to enter someone else’s property it is a well-earned injury.

What happened today casts once again a light on Polish insensitiveness. A lot is spoken that Poles, whenever they see something wrong, turn their heads away, pass by pretending not to see anything. A policeman in civilian clothes who rode a tram in Warsaw this morning had the courage to reproach a hooligan who had thrown a rubbish bin into a tram. A young (18-year-old, inebriated) criminal pulled a knife out of his pocket and stabbed the policeman, who later died in a hospital.

I pay homage to this brave man and like many people wonder what to do with the murderer. Many commentators driven by pristine emotions suggested that he should be executed. Tit-for-tat, the easiest way out. In practise he will appear before court and will be imprisoned for many years. Neither variant solves anything.

I’m not in favour of capital punishment, but it gets my goat whenever I think thousands of prisoners do their time at taxpayers’ cost. Hence, I have two modest, I suppose, proposals.

Criminals who commit petty crimes and those who made illegal or thoughtless things that harmed other people should be FINED severely. The financial disincentive should work very well, after all humans are driven by greed, aren’t they?

But sometimes the convicts have to be isolated from the rest of society. I think privatisation of penitentiary industry would not be a bad idea. The guys who fell foul with law should earn for themselves. The business would be viable, we would have a plenty of cheap labour force utilised for building motorways to move this country forward.