The historic day

Last week of the campaign was hot. On Monday evening two would-be prime ministers clashed in a TV debate, lacklustre, full of trotted out catchwords, hackneyed promises and hollow words. The other day TV stations hosted a debate of eight party leaders. That show’s value added was much higher and probably substantive, appealing appearances of small party leaders (Mr Petru, Mr Zandberg) took some support off the largest parties and helped smaller grouping garner more votes. Nevertheless the Tuesday’s debate laid bare how embarrassing Mrs Kopacz and Mrs Szydło are and how leaders of other parties stand out. I suppose the debate convinced many voters the times of choice between PO and PiS only should be over and a breath of fresh air is essential to unfreeze Polish political arena.

Today I turned up to the polling station in NI just after 9:00 a.m. I have a habit of going to vote possibly early, but never, ever have I seen such turnout. Clement weather and clocks going backward a few hours earlier could have contributed to high number of citizens casting votes. Media reported numerous queues in polling stations, while official figures by PKW showed the turnout at midday was anything but impressive, but at 5:00 p.m. up-to-the-mark with commendably high number of voters visiting polling stations in big cities. Such facts theoretically should not augur well for PiS…

Needless to say ban for publishing part results of the elections in the era of the Internet is ludicrous. Disguised results, varying from one to another, were disturbing, most showing swingeing lead of PiS (allowing them to form a government without having to look for a coalitional partner) and distressingly high score of Kukiz ’15.

Preliminary results show 4 parties will definitely make it to the parliament, PSL is balancing near 5% threshold, Kukiz is unlikely to get a double-digit score and… PiS will get what they were fighting for – simple majority in the parliament. They managed to attain what was unattainable even for PO at the height of its popularity. Fortunately, along with Kukiz, they are short of some 20 deputies to change the constitution.

I congratulate the winners and wish they run Poland well. We have to respect the citizen’s will. Let’s give them a chance.

Looking for a flat

Maybe it’s not a perfect moment, but I’m taking the moment and trying to make it perfect to revisit my post on property market published two years ago and find out what has changed on the marketplace since then.

The best answer to the question above is: “nothing, except for rising number of transactions”. In October 2013 I predicted a 3% y/y drop in property prices, while in reality prices were, despite small fluctuations, flat.

The graph to the right shows average property prices (per sqm) in Warsaw over the last 3 years (source: NBP). Cursory analysis of the graph tells you that: (1) sellers have begun to realise the boom is over and asking prices had to be adjusted down to lure buyers, (2) difference between asking prices and transaction prices narrows, (3) primary market witnesses a revival, while secondary market is featured with more price stability.

A careful analyst will scratch beneath the surface and discern two other regularities that need to be taken into account. Firstly, each quarter sample of properties making up the average is different. In one quarter properties of higher standard in better location could be traded, thus inflating the average price, in another quarter there could have been higher turnover in poorly located or rundown flats, sending the average price down. Secondly, the difference between asking prices and transaction prices does not show how steep discount a buyer can expect, since samples used to derive the averages are totally different.

Since primary and secondary property markets in Warsaw are worlds apart (to be elaborated on down the post), they behave differently, yet analysing the property market in Warsaw as a whole, judging by AMRON-SARFiN data (gathered from notaries), transaction prices are flat as a pancake, ranging between PLN 7,100 and PLN 7,400 per sqm over the last 3Y, a variation that is negligible. These figures however also need to be interpreted with caution, since samples of properties being composites of the average vary from quarter to quarter.

While looking at the post from October 2013, it does not hurt to review the factors which could drive property prices up and down.

The factors meant to increase property prices:

1. Interest rates – today NBP’s prime rate is 100 basis points lower than 2 years ago. This has not boosted much demand for mortgage loans, however distorted creditworthiness criteria at some banks. This is a trap, since if a household can afford repayments today, it might fall into troubles if interest rates revert to where they were in 2008 (which could mean nearly two times higher instalments).

2. Income brought by bank deposits is even lower that 100 basis points than 2 years ago, on account of overliquidity in the Polish banking system. According to press information, the outflow of money from banks into the property market is taking place, since greedy depositors keep chasing higher return. Frankly speaking I do not understand their rationale for investing on the property market (other than the fact property is tangible). If after-tax rental yield is now in Warsaw some 4%, while after-tax return on a decent bank deposit is 2% (absolutely attainable), the extra income is 2 percentage points (no, not two times higher, you should calculate it as percent of capital invested). Now from the two additional percentage points per year of the yield you should deduct:

I) one-off transactions costs incurred at the purchase of a flat (ca. 3% for notarial charges, transaction taxes and entry in the land and mortgage register + potential commission for estate agent of another some 3%),

II) inevitable costs of void periods, i.e. when a flat is empty and not only does not earn income, but generates fixed costs, and cost of finding a tenant (additionally inflated, if you entrust the task to an estate agent),

III) cost of wear and tear,

IV) premium for uncertainly regarding price appreciation / depreciation – at exit this will materialize,

V) liquidity premium (compare how easy it is to convert a flat and a bank deposit into cash).

I deliberately do not count in problems with rent collection and damages done by tenants, since these can be covered from cash bail paid up-front, as well as all the hassle letting a property involves.

I can also reiterate the question how the increase supply of flats for rent will be met by demand from tenants, in the long run I do not see a balance here…

3. Cash buyers, who have waited for the perfect moment, keep generating demand. On top, I see these days lots of people who are at the process of upgrading to a more posh property (the question is whether they plan to dispose of previous flats).

4. In October 2013 supply of flats under construction was shrinking, today it is back rising and record-high. In two or three years, I foresee a supply overhang…

5. The government-run borrower-support scheme in Warsaw had little impact on primary market, because of the low price limit, however in the outer districts, prices of some flats were adjusted up to fit the limit, while in those more attractive downward adjustments were witnessed. Since September 2015 MDM covers also secondary market, however with price cap of some PLN 5,200 per sqm, only a tiny minority of low-standard flats fall under the scheme.

The factors that were meant to decrease property prices:

1. Demographics – does work, but to minor extent. Two years ago I mentioned it as the most important factor in the long-run. We need to wait five to ten years to observe its impact on property prices.

2. Situation of youngsters – has not changed much in terms of job security of salaries.

3. Recommendation S – I believe higher requirements towards buyer’s equity will be more observable, when the missing percentage of equity will not be that easily supplemented with MDM subsidy or will not be insured easily. Full impact will be witnessed in 2017, when 20% own contribution will be a must and only half of it could be covered by MDM or low-equity insurance, this will mean each buyers will need to have some 13% of property price in cash…

4. Banks have somewhat unleashed their expansion in the mortgage loans segment, however it might be curbed by the newly enacted laws after the parliamentary elections. Banks will most probably need to pay a tax on assets, which will not hurt the banking sector much, however the solution for the problem of CHF-denominated loans has not been worked out and the threat of severe losses for the sector if the most abject scenario (converting loans at the exchange rate at which there were taken out) remains conceivable. If so, the property market might go into decline for two reasons: (1) banks would curb lending on account of capital shortfalls, (2) owners of many flats currently unsellable due to LTV > 100% would be unlocked to sell their properties and swap them for bigger ones (however they would find it harder if bank lending comes to a standstill).

5. Future insecurity – no headway since 2013

6. Property prices remain steep, but flat, so if wages rise, availability of properties increases.

7. Costs of living are generally flat, with official deflation, yet prices of basis goods, including household upkeep, going slightly up.

All in all the two groups of drivers have been offsetting each other and I expect them to do so in the near future. A considerable decline of the property market, if no external shock hits, is likely around 2018, when combined forces of inevitably looming demographics, oversupply of flats on primary market, more stringent mortgage lending regulations in force, should send real property prices down.

On my own front, I began to look for a flat actively this month. My general criteria a sought flat needs to meet:

- one bedroom, between 50 and 55 sqm area,

- separate kitchen,

- garage is a must,

- built after 1995

- location: Ursynów, Włochy or Ursus,

- budget constraint depending on a district.

The last dilemma still being sorted out is between the primary and secondary market.

A flat from a property developer:

- is brand-new and you are nearly free to arrange it the way you want,

- incurs lower maintenance costs in the first years of living,

- is less likely to be a pig in a poke (defects coming into the light and requiring additional repairs)

- involves lower transaction costs at the purchase.

In turn a flat from a secondary market:

- can boast of better location and better developed infrastructure (especially in Ursynów, where supply of new flats is short),

- might be ready for moving in,

- might have more reasonable layout (easier to find two rooms above 50 sqm and separate kitchen) and might have been built from better materials (regular bricks rather than pre-fabricated blocks).

Moreover, the primary market in terms of concluded transactions is booming (both supply and demand on the rise), hence developers might be resistant to attempts of haggling down the price, while the secondary market is in the doldrums and impatient sellers, tired of putting up their flats for sale for months, or even years, are willing to make bigger concessions. I can admit to have browsed property advertisement since taking the exam (so for more than 4 months) and I have noticed several advertisements stay there intact (dates are updated so that they appear closer to the top of the page, but price stays the same). Offer of flats in Warsaw today is virtually the same as it was in early summer...

What also need to be noted on the secondary market is the extent to which it has been plagued by incompetent estate agents. I understand sellers might be too busy to deal with sale process on their own, but for a brainy and well-versed in legal matters buyer, who also has some spare time to look for a property, an agent adds no value (confirmed by brainy friends who used to make money on being well-paid intermediaries in good times). On the market which is in the doldrums, competition among estate agents is high and you can find the same flat (same photos) put up by several agencies, at different prices, with different usable area and located at different streets, which additionally proves incompetence of estate agents!

Another question I am facing is, how to buy not to lose on it. Given my relationship status and size of sought flat, the flat I’m looking for from the beginning is not the target property. If prices go down, I argue this should not be the problem, since my flat will be worth less, but in absolute number, prices of larger flats will go down by even more.

On the other hand, what the future holds is uncertain. I do not know whether a girlfriend appears in three months or in three years, when, if at all, I will get married and when my children will be born. My parents, who agreed to support me financially in my plans, think it would make sense much more to firstly find a girlfriend and then to think about a target flat or house. Nevertheless they agree there is the stage of a relationship when people should live together, but it is too early to take far-reaching decisions, such as buying a property for more than half a million PLN. And they also agree I enter the age when a male should live on his own… Something I long for, yet not at all costs.

After all young males (including me) feel a desire to be independent, have something that belongs to them, have privacy essential at such age and take responsibilities. Oddly enough, the percentage of young (aged 25-34) people in Poland living with parents keeps increasing. Not only the harsh labour market is to blame. Generation gap is waning, parents are more tolerant, so decision not to fly the nest, not to taste duties and responsibilities taking care of oneself involves, appears convenient for many adults.

Home straight before the vote

The topic of the oncoming parliamentary election in Poland has been neglected on PES for too long. Like many Poles, disgruntled with feeble PO-led government, I have grown indifferent to politics, hence the absence of up-to-date commentaries. Beware though! You may be incensed, you may be fed up with politicians, yet it must not be the reason to take umbrage at democracy at all and decline to go to the polls; sadly many clever people around declare to do so, for the first time since many years.

Since many voters have not yet decided who they will support, a short (biased) overview of what the parties which stand a chance of garnering seats in the parliament lure us with.

1. Prawo i Sprawiedliwość (Law and Justice) and its sidekick-groupings

The odds-on favourite winner according to all reliable polls, with support oscillating between 30% and 40%. Since the party generally lacks ability to find a coalitional partner and refuses to make concessions in its pursuit to lift Poland from ruins, it aims for a score which would secure them a simple majority in the parliament. Given the recent drop in support for the party and how numerous the anti-PiS electorate is, the scenario seems now out of reach, although the party capitalises well on Poles’ weariness of Platforma being in power for too long.

The party strives to run a substantive campaign with focus on economic agenda. While the end is commendable, means leave a lot to be desired and hollow promises do not hold water, when confronted with shortage of budget proceeds to finance the joyful spending spree.

For a long time PiS kept some of its prominent leaders (Mr Macierewicz, Ms Pawlowicz) locked away, presumably not to deter moderate voters. Only recently the party’s president, Mr Kaczynski, began to put in public appearances and for some reason this coincided with drop in support for the party.

While I can comprehend the Polish conservative society care little about problems of civil partnerships, abortion, in-vitro, etc., I find it mind-boggling how short a human memory can be. The rule of PiS and its coalitional partners, brought to an end in October 2007, two years of spoiling Poland’s secret services, justice system and harnessing them to chase own political goals should have been engraved in Poles’ memories. This style of doing politics was rejected by Poles in 2007. Now it is likely to return, with much stronger magnitude…

2. Platforma Obywatelska (Civic Platform)

After eight years of being in charge of the country, PO begins to pay the price for numerous scandals, getting riveted to privileges of power and for straying away from ordinary people’s problems. Thanks to the generous injection of money from the EU, under PO rule Poland has moved ahead considerably, yet the progress has not necessarily been felt by many Poles in terms of their standard of living. As I once quoted Mr Sienkiewicz, I can reiterate an average Kowalski has not benefited enough from all the positive developments which have taken place in the recent years and asks “what’s in it for me?”. Prime minister Kopacz has discerned it, yet far too late, and had far too little time to catch up for the lost years.

The wake-up call for the party was the lost presidential election, a clear signal many Poles opt for a change, just for the sake of overthrowing the current state of affairs, even if what is offered in return is uncertain. PO is desperately fighting to regain support of disillusioned voters and entices groups of voters who have never been PO’s core electorate – hence since Mrs Kopacz took charge of the party, PO’s agendas, both the economic and the social, drift left. Maybe knowing PO stands no chance of winning over those who adore PiS, it strives to take over moderate leftist electorate, strategically the step is wise.

Another sign of party’s desperation is inviting political outcasts to candidate lists in the election. Presence of Mr Michał Kaminski and Mr Dorn (both guys were among the ardent builders of would-be Czwarta Rzeczpospolita, yet rejected by Mr Kaczynski instead of sliding into political non-existence, have found a cushy shelter on PO’s lists) and Mr Napieralski (he should begin to search for a regular job, a task well beyond his capacity, instead of living off taxpayers’ backs) is a ludicrous step I find barely forgivable.

As I keep track of the campaign, solitude of Mrs Kopacz is more and more noticeable. She goes it alone, she fights alone, her party-mates seem to be bracing for setting themselves up in the more comfortable role of the opposition.

3. Zjednoczona Lewica (the United Left)

To keep their heads above water, Mr Miller and Mr Palikot have decided to team up and fight the battle to survive together. This means they will need to reach the hurdle of 8%, a result that seems attainable, yet is glaringly low if you bear in mind, according to sociologists’ research, some 30% of Poles declare their views are leftist.

The agenda ZL (I will stoop low enough to “sink” them, since I believe criticism should be substantive and not referring to semantics) offers is clearly leftist, often populist. Thumbs up for them for laying out an agenda that could actually benefit the poorest, thumbs down for the same agenda which is unviable and would hamper economic growth.

All in all, ZL attempts to position itself against PO (too liberal in economic terms and not enough liberal in social terms) and PiS (with makings of infringing civic freedoms and track record of treating favourably the wealthiest), looks out distinct to them, yet lacks credibility, most probably because its image has been tainted by dodgy party leaders (Mr Miller and Mr Palikot) out of favour with several leftist voters.

4. Polskie Stronnictwo Ludowe (translated as the Peasant Party)

Current coalitional partner of PO. In polls always balances near the 5% parliament entry threshold and always scoring much higher in actual elections. The party’s credibility (with me) has been dented by recent utterance of its leader, Mr Piechocinski, who claimed the great coalition of PO, PiS and PSL would be to the benefit of Poland. Screw loose, dear neighbour, determination of your henchmen to hold on to stools in ministries and government agencies must be really strong, but talking your head off has some boundaries! If PSL deputies find some seats in the parliament, they will make up a coalitional partner for anybody.

5. Kukiz ‘15

Whenever a grouping has its leader surname it its name, it brings out associations with personality cult and I find it off-putting straight away. Mr Kukiz, having scored an impressive result in the presidential election, has wasted much of his alleged potential afterwards, yet eventually has also managed to get his act together and compile lists for elections. Despite having no agenda, since any agenda is a deceit, he still stands a chance of making his way to the parliament, carried by the votes of the fed up, outraged, duped, etc.

6. Nowoczesna.pl

Set up less than four months ago, Nowoczesna.pl endeavours to offer an alternative to PO electorate let down by how PO has strayed from its original economic liberal agenda. Nowoczesna calls for reforms PO shies away from, yet its agenda is disguised as beneficial for all citizens, while many points (e.g. flat taxes) of it favour only the richest. For the sake of straightforwardness, I would prefer if it clearly dubbed itself representatives of entrepreneurs and corporate rodents.

Two weeks ahead of the election, the most likely scenario is that all six parties make it into the parliament, but PiS will not have the ability to form the coalition which would have majority in the lower house. The only natural partner for them would be Kukiz ’15, alliance with some deputies from PSL and ZL (then ZLew) seems also conceivable. Most likely we will be in for long squabbling that will benefit nobody.

Personally… In the lower house election I am going to put a cross against Nowoczesna.pl. Let’s face it, they best represent my interests as a financial sector employee. My rationale is selfish, yet if a scenario of broad coalition against PiS materialises, I would prefer it to have economically liberal tilt and only presence of Nowoczesna.pl can ensure it.

In the upper house election, I will vote for (and not against other candidates) professor Monika Płatek backed by ZL, an outstanding lawyer and a voice of common sense in public discourse regarding civic freedoms. I hope PO electorate, plentiful in sub-Warsaw constituency, will hold back from voting for Mr Giertych, indirectly supported by PO (shame on you, PO) by not putting out a counter-candidate.

Looking forward to days after 25 October 2015; will be anything but boring!

In the future, in the past, going nowhere, much too fast

Perfect, clement weather. A whiff of late summer in early October (day-time high of +23C, not much short of October heat record for Warsaw of +24.5C, set on 5 October 1983). Spent most of the day outdoors, lazily or actively, yet in the great companion. Reflective mood has kept me company while I was basking in the autumn sun anyway…

Today is the sixth anniversary of my mother’s best friend’s death. 4 October in 2009 also fell on Sunday. She passed away late in the evening, thus losing a battle against cancer she had fought for months ahead of the sad day. Back in the early years of blogging I followed the principle to keep the private stuff away from the PES. I do not regret abiding by the self-imposed rules at that time, yet regret not putting in words my feelings at that time and confining only to succinct coverage of the funeral. Our families used to be friends over the period of my childhood and teenage years. Ciocia Magda used to be one of my nearest and dearest, closer and more trusted than most relatives. Piece of life, hundreds of memories turned into ashes, yet alive as reminiscences of her survivors.

Today also falls the third anniversary of most crucial conversations I had with three people which three days later were compiled into the timeless Guardian Angel conversation, the post on PES I most frequently revert to. With hindsight, as three years passed by, I am immensely grateful to myself for picking up courage to face up to all the bitter feelings overwhelming me at that moment. Freeing the thoughts, putting them into order, confronting them with I had been told by wiser fellows sobering me up have helped reach the turning point in breaking free from that hapless affection.

Getting over that miserable infatuation took me good six months. For the last year of working at the Employer’s, my professional relationship with Her was correct. While seeing Her for the last time on 31 July 2014, on my last day of work, I did not resent Her for what we had been through. Yet She was the only person deliberately I cut off. I have met or spoken to all my immediate co-workers; all, except Her. Oddly enough though before I had been in much closer relationships with girls / women than in that dead-end something I would not call a relationship, I still feel She was a piece of my life. She has not left a wound, yet a scar remains.

The Soulmate (a work-mate at the Employer’s today a friend) while we met last month told me She had probably broken up with that guy. “A pity, She will turn 32 soon, She will find it only harder to find a decent boyfriend, this is not the state of affairs I would wish on Her”, I replied. I sincerely wish Her all the best, yet I felt a twitch of twofold nature: I felt this could be chance to start over and to be honest with you, I smirked at thought She got the well-deserved punishment (for what?). I was curious whether Soulmate mentioned this to chin me up (I am not the only one who has it uphill with the opposite sex) or to gently hint starting over. Two weeks later I outspokenly told the Soulmate I actually had not been indifferent to the news she had passed to me, yet…

Let’s face the truth. Lighting never strikes in the same place twice, as the saying goes. You could argue, we are both three years older, more mature, wiser, our lives have moved on, we have experienced more. We are both three years older, but She still is four years older than me. We have no common source of income, I earn more than twice as much as in 2012 and for some reason She and her ex-boyfriend are no longer together – if anyone thinks these developments make a fundamental difference – shame on you! We could forget who hurt who in the past and discover each other as if we just met, but we would not erase what set us apart from each other. I have my pride. Being second-best does not make sense!

Dance class

September. Nagging heatwaves have gone by for good. Nights are drawing in. Time to break out of the lethargy in which I plunged just after the exam and in which I lingered over nearly the entire summer. Time to focus on less mundane stuff than floating between home and work with some occasional only entertainment.

Nearly three years of swotting up for three levels of the examinations have worn me down and put off learning for a while. My idea to refresh my command of German, lost on account of not using it (I was reminded of it specifically painfully last year while holidaying in Germany), has been given up. Firstly, I did not feel like taking up another course, doing homeworks, etc. Secondly, signing up for a language course would require attending classes twice a week either early in the morning or in the evening, which for work-related reasons (the New Factory requires more and more flexibility in terms of business trips and staying overtime) could not be viable, or on Saturday mornings, which in turn does not come into play for family-related reasons.

A new pastime activity was meant to involve some sort of physical exercise, so eventually I have plumped for dance classes. So far I have had two lessons and absolutely do not regret my decision!

Definitely it is never too late to learn something new and useful. While attending parties and weddings I was never chair-ridden, but I danced as good as I could (just as many people do). But why dance as you can, while it is better to “can dance” (pun intended, yet sounds silly, unlike the Polish lepiej umieć tańczyć, niż tańczyć jak się umie). My selection was the party dance course (taniec użytkowy) – not complicated, yet most coming in handy on social occasions.

Before signing up I had some doubts whether I was up to it. My sense of rhythm is below-average, yet my co-ordination of movements of limbs must not be bad if I drive a car at absolute ease, so I hoped I would not bugger up all along.

After two classes the impressions I can share are the following:

- as long as the pace of learning is moderate and an instructor does not try to teach you too much, grasping the dance comes up naturally,

- switching the partners continuously adds much value to the learning, since you do not learn how your partner moves, but develop universal habits and learn how to send and receive impulses to and from your partner,

- dancing not only enhances your daily routine but also helps you forget about the quandaries of the daily grind,

- it is essentially the chance to meet new people and simply have fun!, but

- unlike some of you may think, odds of finding there a life companion are statistically and practically low (in my group those people who do not come with a partner, have been sent by their partners to brush up on their dancing skills).

There was a time people urged to take a dance class to find a girlfriend. When they gave up on urging, I settled for it on my own! The sound approach, I believe, is to go there for any other reason than to find a girlfriend. Otherwise, I would have ended up frustrated!

And once the current course draws to a close, I will sign up for another one, just to have fun!

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.

Pre-election bidding

Two months I uncompromisingly dissected the economic agenda of PiS (or rather a string of joyous give-away proposals) laid out to lure benighted voters. Campaigners of PO, slowly bracing for retracting into new role of being the opposition, had done little to challenge the puffed up expenditure assurances made by their competitors and their efforts had boiled down to a simple message that if the promises were kept, Poland would follow the traces of Greece. Until now…

On Friday rumours that PO would unveil its revolutionary economic agenda leaked out. Somebody had not managed to keep their mouth shut until Saturday and highlights of PO’s new agenda came to the light one day earlier. Scrapping social security and health service contribution and shifting towards funding the two systems from the state budget looked appealing, since such modifications would simply workings of the state administration, however raised doubts right away – whether the changes would fall into line with constitution and how they would be financed?

Yesterday I was all day out, hence had no chance to listen to speeches during PO’s convention, however what could be put together from the media coverage of the event and what can be found in the underlying official agenda document, do not square. And does not hold water.

I thought PO, despite its numerous drawbacks, slip-ups, and general fatigue, would at least not stoop so low to join senseless bidding in terms of economic promises. I should have expected to have been wrong, yet another letdown aches. The other, par for the course anyway, was that after reading the agenda released yesterday, I can only concur with Mr Kukiz, who incidentally refused to present any agenda of his grouping and claimed all agendas are a sh*t. Cross my heart, I find no more suitable word to describe the essence of PO’s agenda.

I am not an expert in education, health service, defence, security, foreign policy, but if there is an area of my expertise, it definitely is economy. Under microscope then goes the part of PO’s agenda dedicated to economic stuff.

First nuance which should grab attention of a careful reader is that the agenda is full of target solutions, not changes that are about to come into effect in 2016 or 2017, but when circumstances permit. On one hand the approach looks wise, since legislation passed in haste or reforms pursued when the government cannot afford to pursue them, would do more harm than good, while on the other, the “conditional promises” are the easiest to go back on.

The first pledge of PO is to crack down on “junk contracts”. Revisions to the labour law include obligation for employers to withhold social security contributions, minimum hourly wage of 12 PLN for junk contracts (only?) and introduction, within a few years, of an “uniform job contract”, a legal agreement having features of regular job contracts, to be applied whenever the bond between employer and employee appears long-lasting. Poland has a problem with abusing junk contracts. Employers save on labour costs (which are not exorbitant in comparison to Western Europe), while employees are deprived of basic security. For the government junk contract decrease proceeds from payroll-related contributions, causing shortages of money in social security and healthcare systems. Yet one needs to keep in mind junk contracts add flexibility to the labour market, beneficial for students, or people taking up a second job and these benefits need to be retained. A missing piece is the proposal to instate regular taxation to taxpayers actually employed by corporations, but theoretically employed as contractors. These are senior managers who are not entrepreneurs and do not risk their own money in business and thus should not be entitled to pay 19% corporate income tax, instead of 32% personal income marginal tax! I cannot quote the source at the moment, but I recall the data showing 2% of the richest PIT taxpayers accounted for 26% PIT proceeds. If senior managers / executives (whose annual pre-tax earnings are between PLN 300,000 and PLN 1,000,000) were taxed like ordinary employees, this would bring substantial inflows to the government and help decrease budget deficit!

The second proposal echoing in the media is the alleged introduction of 10% PIT rate and scrapping social security (ZUS) and health service (NFZ) contributions. I do not know what was declared by PO leaders in their yesterday’s speeches, but according to the agenda: (1) 10% will be the effective (not statutory) tax rate for the poorest families, (2) the solutions put forward are long-term targets.

There has been a lot of confusion about these proposal. For the first time in my life I heard of “uniform” tax, which unlike journalists have interpreted it, is not a flat tax, but presumably one tax which replaces regular income tax and other tax-like contributions. PO most probably suggests progressive taxation with pro-family allowances or deductions with tax rates not specified at this stage. What is however more disturbing is that in return for scrapping ZUS and NFZ contributions, income taxes would need to be increased.

The rest of the chapter on economic agenda is full of general, hackneyed proposals. I could comment on any of them with little hope anyone would take the trouble to read the whole post from cover to cover, but will confine to a few main conclusions:

(1) I could write such agenda as well. You could hire a bright 20-year-old student who will list and elaborate on everlasting modest proposals, such as: decreasing unemployment, reducing taxes, simplifying tax systems, improving tax collection, cutting down on red tape, boosting exports, supporting innovations, fostering investments, effectively using EU funds, building new roads, and go on and on…

(2) Most proposals are very general and lack specific solutions. For instance the sentence: “we will help mortgage borrowers who struggle to service their debt in a manner which will ensure equitable treatment of debtors repaying mortgage in Polish zloty and in foreign currencies and will not put at peril stability of the banking system” is not only too long, but also does not specify measures the government would use to achieve the goal, as well as the cost for the taxpayer. Lack of precision is the key drawback not only of political agendas, but is the broader problem of the whole politics in Poland – just bring to mind how questions in the bygone referendum or the one proposed by president Duda (especially the one asking about decreasing retirement age) were formulated…

(3) Some proposals include the total cost of the proposed solution, but the readers get only the final number, not how it was arrived at. I realise few people read agenda, even fewer would read attachments with calculations and assumptions, even fewer would be able to verify their reliability, but for the sake of transparency and credibility, would it hurt to back the final figures with calculations.

While I watch the drowning man (PO) desperately trying the catch the straw (regain its disgruntled electorate), I am being put off tactical voting (as many people I am weary of the current government, yet wary of PiS wacky government) but lean towards voting for… Nowoczesna.pl. When the association was established in May 2015, I was sceptical towards the grouping and its founder. Mr Petru is more a celebrity and representative of “survival of the fittest” approach to economy, than an economist, leaders of Nowoczesna.pl often represent the cruellest face of corporate capitalism, not something I hold dear, yet something I live off. If there is grouping that would best represent my vested interests and future financial well-being, it appears to be, oddly enough Nowoczesna.pl. Yet by no means should such party head the government. It could only tip the scales in decision-making as coalitional partner of a less economically liberal party. I may wish Nowoczesna.pl enters parliament, but it should have a tiny tally of seats there, simply because it does not represent ordinary people, whose, not mine, well-being should be primarily fostered!

Hotter than ever, drier than ever…

Gone is probably one of the hottest summers in the history of Poland. Gone are the tiresome heatwaves. Gone is the thermal discomfort we have endured for weeks.

I am fond of statistics, in particular of weather statistics, hence I have taken the troubled to quantify August 2015 which was the warmest August in the history of temperature measurements in Warsaw - average temperature reached +23.0C, beating August 1992 when it stood at +21.5C and was the second warmest month in the history of Warsaw since 1880, after memorable July 2006, when mean temperature was +23.5C.

The chart below displays quite well the temperature anomalies witnessed last month in Warsaw. Over virtually the entire month average temperature was above mean temperature for specific days, with considerable deviations at the end of the first decade of the month and in its very last days.

 

The month had a misleadingly cool commencement. On 1 August I was setting off to the mountains on 4 a.m. and outside it was quite chilly, somewhere behind Nadarzyn car thermometer showed +5C. I thought I could do with winter tyres as well…On the same day temperature shot up and two days later exceeded +30C.

The heat wave according to the phenomenon’s pure definition lasted 11 days, since each day from 3 August 2015 to 13 August 2015 maximum temperature recorded was above +30C, and was the longest heat wave observed in Warsaw ever (oddly enough the average number of days in a year when temperature is above +30 is mere five). Had the definition been adjusted down by one Celsius degrees, the heat wave would have lasted incessantly for 15 days, until 17 August.

The heat wave reached its climax on Saturday, 8 August 2015, when temperature rose to +36.6C, 0.4C short of heat record set exactly two years earlier. The day was followed by record-hot night, when temperature did not drop below +22C even before dawn. The average temperature over 24-hour interval stood at +29.2, far warmer than in Athens, Rome or in Madrid on an average day in July.

Days between 19 August 2015 and 26 August 2015 brought blissful relief from heat, with day-time highs in mid +20Cs and lows below +15C. Had it not been for that colder period, August 2015 would have gone down as the hottest month ever.

Last days of August 2015 and 1 September 2015 brought another influx of unusual heat, with temperatures in Warsaw reaching +34.7C and +34.5C on respectively 31 August 2015 and 1 September 2015, with the latter breaking the previous heat record for September set on 7 September 2008 (+30.7C).

On top of this deficiency of precipitation also made itself felt – rain fell twice in August 2015 – on 16 August and on 25 August with the two showers being a drop in the ocean that should lash down from heavens to bring back hydrological balance in Poland.

Abnormally high temperatures have given nearly everyone a rough ride. As experts point out, it is not the intensity, but length of the heat wave that determines its tiresomeness for people. Hence three days with temperatures peaking at +37C are more bearable than two weeks of heat reaching only +32C each day.

Despite weather conditions hazardous for health, number of reported diseases caused by heat was not appallingly high, especially if cases of drowning in rivers and lakes are counted out.

Whoever could, took shelter from the heat in air-conditioned interiors. With increasing number of offices, other public buildings and flats having air-con put in and turned on, electricity consumption soared, reaching levels last observed in record-cold first decade of February 2012 (when temperatures at night dropped well below –20C). In the meantime, power-generating blocks in power plants could not be cooled properly (due to shortage of water and its too high temperature) and this resulted in planned blackouts. Several industrial off-takers faced restrictions on consumption of electricity, something that was just a matter of time and what happened for the first time since the ultimate downfall of planned economy in 1990.

Drought also closed the gates to the forests for tourists, on account of extraordinary peril of fire. And last, but no least, many trees began to shed their yellow leaves far earlier than usual. Despite the heat, it felt like autumn. Yesterday, when I cycled via Las Kabacki, paths were covered with a blanket of leaves, something which ought to be observed in late September.

The problem with the heat in Poland is that an average Pole has no chance to shield it. In winters, when temperatures reach –25C you simply stay at home, keep warm (unless your housing conditions are dire) and only the thought of the bottom line on your heating bill wipes the smile off your face. In summer, an average Pole needs to withstand temperature of +30C inside their dwelling. While in shopping malls and modern offices and in cars air-conditioning is nearly always in place (what an incentive to stay overtime), residential housing still lacks it on larger scale, but given the direction of climate changes, air-conditioning will not be just a luxury, but a must, allowing one to survive the summer comfortably. These musts, while once they grow prevalent, will boost energy consumption again… Summer electricity bills might soon become the price to pay for lower heating bills in milder winters…

And what is about to ensue thereafter? Today temperature fails to creep above +17C, it is astonishingly chilly if we bear in mind just five days ago it was +34.5C. Weather patterns do not tend to recur, therefore record-hot August might to followed by: very warm autumn or a very cold autumn, or a typical autumn, or by any combination of the three. Long-term numerical forecasts foresee an anomalously mild winter, while some signs wildlife and plants send to us indicate a harsh winter ahead.

My own tolerance for heat somewhat decreased this year. In 2012, 2013 and 2014 I actually did not mind it when temperature was above +30C. I remember well walking around the office around midday on 8 August 2013. Temperature was +36C, I was wearing suit trousers and long-sleeve shirt with pulled up sleeves and felt no specific desire to rush to the air-conditioned office. This year even in the temperature of +30C I could sit idle, have nearly nothing on and soak with sweat. There were several night when I could not sleep a wink because of the heat. Drained of energy, I began to feel sympathy with Greeks whose laziness is to some extent grounded in the climate they fail to endure.

In the meantime my holiday plans have gone down the drain :(. The travel companions, while I made the reservation and reached out for money to make a confirmatory payment, dropped off, while our destination, Hungary, was invaded by scores of ruffians (pardon the expression) and actually we would be in a quandary, wondering how the situation would unfold. While it is politically correct to take pity on refugees and sympathise with humans who had to flee their war-inflicted homelands, I argue it is advisable to ask ourselves whether not only we can afford to play host to refugees (the answer is clear), but whether those people would assimilate into our civilisation. As a nation, Poles would respect their culture, religion (unless they are lunatic Muslims attempting to wage a war against the rotten West), etc., but in return they would need to adjust to customs of the country which offers them asylum. Frankly speaking, I do not embrace a prospect of thousands of unemployed mouths to feed inhabiting refugee camps or irate hooligans vandalising public infrastructure or robbing trucks with food (as they allegedly did in Hungary), exhibiting their anger with the fact Europe fails to greet hordes of immigrants with open arms.

This may be unpopular, but the influx of migrant to Europe, stemmed or not, is the price to pay for attempting to spread democracy in areas of world where dictatorship would simply prove better. Democracy is by far the best political system, provided a society has reaches the proper level of development. Guys from the United States who excel at breaking out wars thousands of miles from their borders should also realise it.

Outdoor gym

The first outdoor gym I spotted was the set of equipment next to Multikino Ursynów, in mid-2014. The second, which I not only glanced at, but also I tried out was the one in Ursus, on Easter Sunday this year (despite the chill). The third, which I grew fond of, was on a hill in Szczawno-Zdrój (back at times when the area was not famous).

The fourth one, I have been doing my best to use at least once a week, is next to the pond in Mysiadło. Photo by Kurier Południowy.

It has been here for almost a year. Locals were urging a very active councillor from Mysiadło to lobby for some exercising facilities near the pond. The very area, though located in the vicinity of lots of dwelling, has been infamous for being a hangout for local fans of alcoholic beverages, including those under age. With the appearance of some infrastructure, i.e. new benches, rubbish bins, the gym; after cleaning up the pond and tidying up the surrounding area, better days have come for the place. Local drunkards still sometimes hang around there, but the place is now often full of young parents walking or playing with their offspring, local pensioners and anglers.

The cost of the gym has not burnt a hole in gmina Lesznowola’s budget – for mere 25 thousand zlotys a few machines have been installed and to my surprise, they have not been vandalised. The facilities are in fact solid and have been solidly attached to the ground, so it would take months of workout to build up muscles strong enough to wreck or spoil them.

I typically go there each Sunday morning. Saturday mornings are reserved for swimming pool, so Sunday is ideal. I prefer the early hours, i.e. around 8 a.m., since odds of not having to wait until another community member gets off a piece of equipment are lower. Plus in the very hot August as we have experienced this year, 9 a.m. was often the last hour when temperature was bearable. Despite the small hour, however, I usually was not the only one to use it. The  morning-time users are generally older than me (from their 30s up to their approximately 70s), both females and males. Some stop over here during the morning jogging, some get off their bikes, take a few minutes of exercise and continue the ride, some come with their dogs and while a dog runs around, they work out. I don’t know how about later hours, but maybe youngsters also attend it.

Advantages, apart from the most obvious, namely that one works out – proximity, free usage and being in the open air, meaning one can also catch precious sunrays.

Drawbacks – scarcity of equipment (less than ten pieces) and no possibility to set the “heaviness” of the machines – either you strain too little or too much.

The outdoor gyms falls into the general trend of local authorities encouraging residents to keep fit. Cycling paths, sport fields (not only football pitches), swimming pools, outdoor gyms – having all of this around mobilises at least some sofa-ridden layabouts to move their arses and do something about their body. Just like investment in education theoretically should prevent structural unemployment, investments in citizens’ fitness should yield savings on health-care and elderly-care spending. The progress in medicine has already lengthened our lives considerably, now is the time to fend for the comfort of living, or to make it precise, to defer the moment it decreases as a result of ageing.

A little more comfort in the neighbourhood

Ul. Mleczarska, whose reconstruction has been tracked on PES since late 2014 (most recently in late May 2015) has finally been opened. The completion deadline of 30 June 2015 has actually been met, since in the last days of June the street was virtually ready (and passable), but the official opening on 6 August was for no apparent reason outshined by another ceremony.

Looking north from the intersection of ul. Mleczarska, ul. Słoneczna and ul. Sękocińska. All photos taken on 20 August around 7 p.m. Holiday period this year reached its peak in August and traffic remains sparse. Sun illuminates the road and fields in Stara Iwiczna, turned yellow due to shortage of precipitation…

The railway crossing with the Siekierki single-track line was built in June, as one of the last parts of the whole development. Looking west, towards the sun, about to set in an hour. In the distance, left to the track, a playing field in Stara Iwiczna, built under the high-voltage electricity wires…

As part of the reconstruc- tion, slopes up to the level crossing have been flattened and lengthened. In July the terrain west to ul. Mleczarska occupied for months by huge earth-mounds, was also levelled. Finally one also knows the plots are a private property (though not fenced off). The owner of this land virtually sleeps on money. I have not checked the zoning plans for the area, yet location-wise the spot is perfect both for residential development and for services. The only drawback is the vicinity of the rail track. Although trains do not run here often, but while heavy sets of wagons with coal trundle, folks in the nearby dwellings presumably experience a little earthquake.

The roundabout at the intersection with ul. Energetyczna. Sizeable, splendid, yet lanes are narrow enough to force drivers to slow down to no more than 30 kmph. Nevertheless, the traffic solutions applied, namely separate lanes for right-turns, smooth the traffic out, especially if we bear in mind Poles still tend to get confused when they approach a roundabout.

Civilisation has crept in. Compare the pics to the right to a series of snaps from roughly the same places taken in June 2011. Everything has fallen into place. Motorists have a decent road (I would argue speed bumps could be flatter), pedestrians a safe pavement, cyclists their riding path.

Once ul. Mleczarska was officially opened, another roadworks crew stepped in to revamp ul. Raszyńska in Piaseczno. Works kicked off all of the sudden on 8 August and 12 calendar days after that the street changed beyond recognition. New asphalt, no potholes, decent pavement. The intensity of infrastructure works could imply local elections are to be held this autumn…

Some finishing works will be done next weeks, lanes will need to be marked out, water drainage roadside ditches will need to be reinforced with concrete panels and I wonder whether speed bumps will be put in here. The signage reminds of the previous ones. I drove there 40 kmph and despite flat tarmack and considerable width of the road, the speed did not seem safe. Too many cars coming in and out of properties by the street, too many reckless cyclists and pedestrians trespassing onto the road without taking a trouble to look whether a vehicle is coming to make the customary urban area speed limit of 50 kmph suitable here. We could do with more discipline among all groups of traffic participants…

I only fear four years will not be enough for the government of PiS to lift my neighbourhood out of ruins.